Breckenridge & Summit County Real Estate News & Information
4 FINANCIAL REASONS TO BUY NOW
In an effort to keep my readers up to date on market and real estate finance, I consider this post essential for people that are on the fence about buying real estate. Many changes are coming and most are not good for buyers. Here are 4 reasons you might want to consider buying now and not waiting.
1. INTEREST RATES ARE GOING UP- The rates have increased about 3/4 of a point in the last six months. Experts in finance expect rates to continue to rise through this year. When buying there are 2 factors to consider. Interest rates and prices. Even with prices softening in some parts of the country, if interest rates rise, it may be less expensive to buy now rather than wait.
2. 30 YEAR MORTGAGE MAY DISAPPEAR- The federal governments role in providing support for home ownership is being discussed and debated. If Fannie Mae and Freddie Mac's roles are eliminated or limited, it may mean the end of the 30 year mortgage.
3. QRM REQUIREMENTS COULD BE MUCH MORE STRICT- QRM's are Qualified Residential Mortgage. Here are some of the changes being proposed:
a) Certain mortgage types would be eliminated
b) You would need a minimum of a 20% downpayment
c) You will need a minimum 690 FICO credit score.
d) The ratios of income to both the mortgage payment and overall debt would become much more conservative (28% and 36% with debts)
There will still be FHA type loans available for buyers that can't or don't qualify under the new guidelines but they can expect the costs and rates to be higher.
4. RENTS ARE EXPECTED TO INCREASE- The supply of available rentals is decreasing and demand is increaing. That will lead to an increase in rental costs throughout the year. The Wall Street Journal this week quoted a report by Reis, INC: Expect vacancies to continue declining, and rents rising through the rest of 2011 at an even faster pace.
