Palm Harbor Realtors on Why Getting a Mortgage Gets Tougher Every Day
Palm Harbor Realtors on Upcoming Mortgage Industry Changes
As Palm Harbor Realtors we’ve been studying up on the Financial Reform Act that became law last month. Government regulators will be interpreting the law and creating rules for years to come, so it’s too early to tell how many of the facets of this sweeping legislation will affect you the homeowner.
In July, RISMedia reported that CMPS Institute (a leader in the mortgage industry) had this to say: “The main takeaway for homeowners and buyers is that mortgage rates are currently very low, and lending guidelines are not as bad as they could be once the new law goes into effect. This means that if you can qualify for a mortgage now, you should do so, and not gamble your homeownership goals on the future impact of the new law”.
They cited that it’s going to get harder to qualify for a mortgage even if you’ve got a great credit score, plenty of equity in your home (should you have one already), and have plenty of cash. And they certainly aren’t alone with their prediction that we’ll all be seeing higher mortgage rates because the law requires lenders to keep a 5% stake in many of the mortgages they originate. This means more risk for the lenders and higher rates for you and me. Plus, the uncertainty of Fannie Mae and Freeddie Mac (now largely government enterprises who back most of the US mortgages today) could add fuel to that fire.
As we see it, it’s not so much a matter of if they are right, it’s a matter of when we’ll all begin to feel the pinch more than we already are.
Harumph …. sometimes we just don’t want to hear anymore!
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August 27, 2010 at 2:41 am, Brian P. Forrester said:
The government through various methods have subsidized keeping interest rates low and they cannot do this forever. Couple that with the looming legislative changes and rates/cost will rise. Right along with the other legislative changes completed previously (MDIA and HVCC for starters!) which increased clossings costs because of the administrative burden created by the new laws.
August 27, 2010 at 6:02 am, Julia Fishel said:
Brian – Your comments are so on the money. That’s why you’re our favorite mortgage professional! Everyone shopping for a loan should visit Brian at http://www.TampaBayMortgageLoan.com!