There is a article in the recent online version of Smart Money that gives several reasons why you should buy now. You can read the entire article here, but it is worth a recap with a little commentary.

One of the Obama administration’s proposals recently is to remove the government from mortgage lending. While many would agree that less intervention by our elected officials is better, it will certainly come with some costs to Indiana homeowners and those hoping to refinance. Increased costs, actually, in the form of higher rates, higher fees, higher downpayments, and in all probability, fewer lenders to choose from.

One of the proposals is to eliminate Fannie Mae and Freddy Mac, the GSEs that have been helping mortgage rates stay low in an effort to fuel a housing rebound. While the public and private banks will then step forward to make loans, the odds are that they will come at a higher price. Not quite the way to fuel a recovery.

I should note that we are really focusing on conventional loans and not FHA, VA, or the USDA Rural Development loans. Just the plain Jane loans that were popular before the meltdown of the mortgage market when FHA started to dominate, and certainly not the 125% loan-to-value; the “no job, no income, no problem” loans; or even the one that were made using the mirror test (place a mirror under your nose and if you steam it up, you get a mortgage).

Speaking of FHA loans in Indiana, that will be my next post, as those costs are going up soon also!

Along with the above changes, it also appears that home loans will become more difficult to obtain if the proposed changes materialize. If it seems difficult to some buyers now, it appears that it will only get worse.

In summary, as rates continue to slowly rise and fees appear to be poised to increase, now really is a great time to buy. As much as I dislike using the phrase “best time”, it appears that with the changes on the horizon, it really may be the best time to buy for quite a while. If you are considering waiting to see if home prices will go lower to offset the increase in rates and fees, you need to read this post on the effects of interest rates on your buying power.

Scott

Your Indiana mortgage expert specializing in FHA, VA, and USDA Rural Development loans.

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