I’m not claiming the world is about to end. Nevertheless, news from lenders in the past week may be indications of some important trends in mortgage lending.
First, came word that the money allocated for rural housing, from USDA, was running out and new loans may not get funded. This is not unusual lately as it is one of the few 100% loans available. It is a red flag, to some because it comes earlier in the year than expected.
Next FHA announced that the FHA upfront mortgage insurance will be changing to 2.25% from 1.75% for all FHA loans where an FHA case number has not been assigned by April 2, 2010. This had been announced earlier without a definite time for implementation. The long and short of this requirement is that costs go up slightly, so if you can find a home between now and April, save a few bucks.
Bigger concern comes as the Fed winds down the purchase of mortgage backed securities, which may cause mortgage interest rates to go up. On the other hand, some good news; rates have come back down according to Bankrate.com and Freddie Mac.
Final analysis, the trends point to higher rates, more rules, less money available, so if you were thinking you may want to buy a home, now may be a better time than later.
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