As April 1 approaches I have to think to myself how many will get priced out of buying that dream home. Don't get me wrong, rates will still be good and home prices low but 2 major factors will be happening that will drive the cost of borrowing money and owning a home up.
First off Fannie Mae and Freddie Mac are making adjustments to their risk based pricing. What that means is that the adjustments to interest rates will go up for various items. Typically these will include type of loan, loan to value, credit score, combined loan to value, type or property and a few other items. These adjustments will affect the interest rate a particular consumer will be able to receive.
Shortly after this FHA will be following suit in raising their costs but will be doing it via their mortgage insurance premiums which will affect your payment and home affordability.
Second is that the Dodd-Frank Act is going to start coming in to full swing. This was passed to keep financial institutions in check. April 1 is when the portion of the act that affects how lenders and loan offers can be compensated comes in to effect. This could potentially affect borrowing costs either in actual costs paid or the interest rate paid. Lenders have had some time to figure this all out but the clarity of the act is vague and the FED is not even sure what part of it means.
Now all of these can and could affect your affordability but you need to remember that rates are still low and home prices are as well. So it still has not been a better time to buy a home. First time buyers especially can buy more home then they dreamed of a few years ago and they need to get out there and buy. Move up buyers can buy that "mansion" they always wanted and of course 2nd homes and investment properties have no where to go in value but up if you buy now.
Make sure to let me know if you have any questions or comments and have yourself a great week.
No comments:
Post a Comment