IS THE DOOR TO A NEW MORTGAGE CLOSING?

I’m not looking to yell fire in the room when there is no fire. But I need to let you know that based on what I read on a daily basis, it is clearly going to get more difficult and more costly to finance a house in the future.  If you’re on the fence deciding whether to buy or not buy, or to refinance, get off the fence. It hurts to sit on a fence anyway. 

There are several factors at play here namely;

1. The mortgage market is facing pressures from new laws and regulations, still-declining home prices and the ongoing need for government-owned mortgage players to shore up their finances. Mortgage origination will be less than $ 1 trillion this year, down  from $ 3 trillion in 2005
2.  Mortgage pricing is on the rise. The current rates hover around 5% for a 30 year fixed rate loan.  That’s up by 1% from last year, but still an excellent rate that you need to take advantage of.  The rate MUST climb as the economy improves. So, things get better in the economy, and rising rates with dampen that enthusiasm;
3. Home prices are bottoming out in some areas, firming up in others, and falling in still others.  A better mortgage today may be a great trade-off to the possibility of lower prices tomorrow. Think about the huge cost of borrowing at a higher rate over 30 years, versus a price drop of a few thousand dollars now;
4. Fannie Mae and Freddie Mac are adding new fees to loans to people with the best credit and raising existing loan fees which started on March 1^st for Freddie's while Fannie's kick in April 1. Citing a need to address risk and price their services appropriately, they will assess a fee of 0.25% to 0.5% of the loan value on borrowers with credit scores of 720 or higher who put down less than 25% of the purchase amount. Fee for scores below 720 will double to 1% if down payment is less than 20%;
5. FHA will require an up front mortgage insurance payment of 1% of loan, and an annual premium of 1.1% to 1.15% when the increase goes into effect on April 18;
6. New restrictions proposed by the Obama administration will include phasing out
   Fannie and Freddie, 10% down payment minimums, and lowering high cost area loan amounts to $ 625,500 down from current limit of $ 729,750.  The limit in non-high cost areas will remain $ 417,000 for most markets;

Its time to move on buying a house!  Let us help you.  Visit me at http://tonyfontana.com and click on the Specials link, or you can visit right hear at  http://fontana.livespot.com/specials 

There you will find my real estate rebates link.  Read about our programs, and give us a call if you are interested in buying or selling in New York State.