Mortgage Updates

August 14th, 2010 6:06 PM
 
Last week while at the grocery store I overheard a couple discuss waiting for a repeat of the 1st Time Home Buyer's Tax Credit before making their home purchase. Fools. Now is a great time to buy a home. Yes, I said home... not house. A house is an investment... a home is where you and your family live... memories are built, the good and bad things in life "happen"... grandma comes to visit ... get the picture? Any way, here are some reasons why you don't want to put off the purchase:
 
1. Interest rates are at their lowest EVER!. The difference between a 30 year fixed rate loan of $150,000 at 6%* and 4.5%* is $142.00 per month. Meaning that you can have a more affordable monthly payment, qualify for a bit larger or nicer home or buy that beautiful new home or condo with $142 Mello Roos or home owners association dues.
 
2. FHA, Fannie Mae, Freddie Mac and Investors are continually changing and restricting a buyer's qualifying ability. Just this week it was announced that co-signed payments will no longer be omitted from qualifying ratio's. This flies in the face of a 20 year practice of omitting the payment if it is proven (documented) that the 2nd party is and has been making the payments within the last 12 months or since inception. This means that if you co-signed for your adult childs auto loan, you now have to qualify with that payment as well. If you co signed for your parents or grand parents, or you brother or sister... you are now held as responsible and have to qualify for your home loan even though they make the payments.
 
3. Just this week a measure passed in congress allowing FHA to increase it's annual mortgage insurance premium from .55 to 1.50%. President Obama is expected to sign this Bill into law. The administration argues that the premium hike will allow FHA to build it's capital more quickly than it otherwise would. (Duh!) Also included, is the option to reduce the financed upfront MIP. However, financed MIP has a less severe impact on qualifying ratio's since it is spread out over the term of the loan. The higher Annual Monthly Mortgage Insurance Premium has the potential to further reduce a borrower's qualifying potential.
 
4. Private Mortgage insurance is back for CA** home buyers with 5 -10% down and credit scores over 720.
 
So the government isn't giving away $8,000, but the rates are lower than ever... and ... who knows what the next round of restrictions or laws will do to limit your ability to buy... All good reasons to buy a home now.
 
*not to be considered a rate quote and used for comparison purposes only APR 6.456% and APR 5.172%
** Not in all areas of CA
Posted by INGRID PIERSON on August 14th, 2010 6:06 PMPost a Comment (0)
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