Deb Espinoza's Real Estate BLOG

Today marks the date that some of the first changes are taking place with regard to mortgage loans. FHA has imposed new fees which include a quarter percent hike in the monthly mortgage insurance premium. Buyers that have been pre-approved for an FHA loan should contact their lender to find out how this affects their purchasing power because your approved loan amount has just been reduced- and this would be in addition to any decrease in purchase power based on the fact that interest rates have been slowly rising. If you are on the edge of affordability and you don't have a home in escrow then you and your loan officer may need to do a little more prep work to get you qualified again for a home value that you need. This may include paying down some debt, waiting for a raise to come through or doing a little credit clean up to raise your score to the next tier that will bring you a lower rate.

If you were waiting for the bottom of the market; in my opinion, you just missed the perfect timing when all planets were aligned for the best price and payments. Although home values may still drop due to more short sales and foreclosures coming onto the market; mortgage interest rates are rising, costs associated with getting a mortgage loan are increasing and will continue to increase as the government attempts to phase out Fannie Mae and Freddie Mac government insured loans due to the severe and unrecoverable loss of billions of dollars they have cost us through the whole real estate debacle. So, even though you may get a house in the next six months to a year for 10% less than today's prices, your monthly payment may end up being more due to higher interest rates and mortgage insurance rates if you are purchasing with less than 20% down. Even those with PERFECT credit will be hit with higher fees to make up for the bad government backed loans and the need to keep the credit reserves up to cover the massive losses still coming on bad loans and non-performing assets. We still haven't felt the full impact on our financial sector because the BofA's, Chase's and other holders of bad mortgages still are not reporting the actual values of their bad investment decisions; (again, in my opinion) one of many reasons that foreclosures are not happening or coming on the market for years; Banks and investors think; "If we don't acknowledge it and just ignore it then we don't have to let everyone know what it's really worth and we can pretend we are worth more and not have to keep credit reserves for all that bad debt".. Well, they are only fooling themselves- and the idiots in the house, senate and government... Oh wait, I forgot! They are already working in the government- hired by our own current administration. Is this the "keep your friends close and your enemies closer" clause at work? YUP. Dang- I got side tracked there for a minute. My apologies.

So back to my point. NOW is the time to buy.. it's only going to cost more in the future for mortage funds, down payments are rumored to be going up, loan fees are increasing steadily and rents are rising. So call a good REALTOR that can hook you up with a reputable lender; and get in on the historical deals in real estate TODAY!