Additional Costs Appear To Be On The Horizon For Borrowers

I received an e-mail announcement this afternoon that additional costs are coming "soon" for borrowers.

First of all, I am not someone who tries to create a frenzy or rush for products -- that means ANY consumer product -- including mortgage loans.

If you're like me you will take action and do the things you need to do when the time is right for you. Just because costs are going up, doesn't mean that everyone should rush out to make a home purchase now!

However, if you've been on the fence or putting on hold that home loan or refinance, with a wait and see attitude of what's the market going to do next, the longer you wait the more you may end up paying out of pocket. Cost are on the rise -- no doubt. It won't be long and we'll look back at the era of 4% and 5% loans with extreme fondness and say, I remember when mortgage interest rates were...

According to Bloomberg today, reporter James Sterngold writes that additional costs appear to be on the horizon for borrowers as housing finance reform takes center stage. Sterngold says, "Borrowers will need larger down payments than in the bubble years, have higher credit scores, and pay extra fees to cover risks and premiums for federal guarantees on government-backed mortgage bonds. This is all according to the report on Mortgage Finance Overhaul to Raise Costs, Reduce Home-Ownership."

If you can afford to act now, don't get caught up in the trap of paying too much for your mortgage. I noticed today that Government rates have risen to at or above 5%. The conventional loans are hovering around 5%. It's only a matter of time before these rates will rise based on what is happening in Washington. Every time mortgage rates increase 1 point, you can afford $50,000 less house. So for example, if 6 months ago you could afford a $300,000 mortgage loan at 4%, now your buying power is reduced to a $250,000 home at 5% interest.

Sara Hibbard is a licensed Realtor in the state of Georgia. If you need a referral to a qualified Mortgage Lender, Sara Hibbard will be happy to introduce you to a lender who specializes in your area of need. Call Sara Hibbard with all your real estate questions and concerns. She is easily reached at 770-399-8108 or e-mail her at sara@sarahibbard.com. Sara Hibbard is Glad Georgia Real Estate Is On Your Mind!