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Renting in Mass
Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011
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 Posted: Tue Jan 05, 2010 4:19 pm GMT Post subject: Funny Email from Zip Realty |
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I received this email the other day. It's funny because while they're obviously hoping that this info will make me want to buy, it actually makes me want to wait since it points to lower prices.
| Quote: | I want to alert you to some issues that could have a significant impact on your plans to purchase a home.
There are several reasons why waiting to purchase may not be a good idea but now there is yet another matter looming that could affect anyone anticipating an FHA 3.5% down payment mortgage loan.
The general reasons to move quickly are:
1. There is less buyer competition now and sellers are more willing to make concessions. This will change in the first quarter of 2010 as more buyers come into the market
2. Mortgage rates are extremely low and offer a buyer the opportunity to shop for a more valuable home. Rates are anticipated to rise as the FED stops purchasing mortgage backed securities in the first quarter of 2010.
3. The effect of higher rates will be to reduce the maximum price home you can qualify for. For example; if you are looking for a home at the $300,000 price level with current rates about 5%, a rise in rates to 6% would reduce the amount of home you can afford down to the $268,000 level. This may well present a problem when it comes to the features and amenities that you were searching for.
4. Another more obvious reason to move quickly is to make sure you take advantage of the Government tax credit program.
These are other serious changes being discussed in DC that may well affect your plans.
1. Regulators want to increase the FHA down payment from 3.5% to 5%.
2. There is a proposal that will limit the amounts paid on behalf of a buyer (seller concessions, etc.) from the current 6% to 3%.
3. A new minimum credit score is being proposed from the current 580 to at least 620 or higher depending on the lender.
An example of how this affects buyers is:
A buyer is looking for a $300,000 home. Today that buyer can use FHA and seller help to get into the new home with about $10,500 in up front cost.
If the proposed changes occur (it is expected that they will) that same buyer will need a minimum of $24,000 to get into the same home.
These reasons to move forward quickly are valid.
I am here to assist you so please feel free to contact me. I'd hate to see you lose out on such a great opportunity. |
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