Why Buying a Home May be Better Now Than Ever

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Record housing prices and still low mortgage rates should entice homeowners; however, the issue is job stability and the future of the country’s economy. With the government reviewing how mortgages are sold and acquired from both the investor and consumer, many changes will be happening in the future on how we buy property. To prevent another financial disaster as the one we have just been through the government feels we need to have tighter guidelines on how lenders write mortgages. Not only will you need better credit put you may need more money down. With the government wishing to back out of the mortgage industry more and more government programs will end up disappearing as the government makes adjustments over the next several years. How will this really impact the real estate market here, if less people are able to afford housing? Will this cause the rental market to blossom into a very profitable business?

As many Americans face foreclosure and have damaged credit where does this leave them in the hopes of ever owning another home? If you are on the fence about buying and you have some money to put down this may be the best opportunity over the next year or two to look at buying property. Not only will major changes happen to Fannie Mae and Freddie Mac but also for other housing agencies such as FHA Federal Housing Authority. As the government wishes to escape their exposure to future financial difficulties it certainly will be interesting to see how this unfolds over the next few years for the lending industry.

So what may be some of the things we could see over the next few years? Most likely housing loans for mortgages will become smaller, higher fees and larger down payments. The maximum loan amount for financing and mortgages being backed by Fannie Mae or Freddie Mac will be reduced and this will cause certain areas like San Francisco not be eligible for financing through the agencies. It could also hinder refinancing for borrowers who try to get a home loan beyond these limits. Some other proposals could be higher mortgage insurance for homeowners an increase of 0.25% for all borrowers. This is only one of the possible hikes for homeowner ship here in the US. You will also need more cash to put down, as of now you can get a mortgage with as little as 5 percent down, but over time this may increase to 10 percent. Nothing has been set in stone and it is still a little too early to really see how things will shape up but no doubt the mortgage and banking industry is heading for some changes and it will be questionable if they will be better for the overall consumer.

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