Both the national and local real estate news is “abuzz” with activity concerning mortgages lately. If you read our last post, you are aware that applications for home mortgages jumped to their highest level in three months last week. But, there was also a lot of “buzz” that many of us, in Ocean County, outside of the mortgage and real estate industries, may not be aware of…
A proposal to phase out the government subsidized entities of Fannie Mae and Freddie Mac has been drafted and is already affecting borrowers even though it hasn’t been finalized. Fannie Mae and Freddie Mac were created by the government, after the second World War, as a means to increase home-ownership in the United States by requiring lower down payments to make home-ownership more affordable for more Americans.
By phasing out these government entities, the administration has all but guaranteed higher down payments and higher mortgage interest rates in the not too far future. As a matter of fact, effective April 18th of this year (one month from now), the FHA will be increasing their Mortgage Insurance Premium .25 of a percentage point on all registered FHA loans. As an example, a borrower putting down the minimum 3.5% on a $150,000, will see increase in their payment of $32/month.
Ok, so I can see the the window of opportunity for First Time Home-Buyers. Where’s the window for “Move Up” Home-Buyers in Ocean County?
Here it is:
With the rush of First Time Home-Buyers entering the Ocean County real estate market, anyone currently living in a 3 bedroom ranch style home that may be too small for their “growing family” could benefit by “buying UP in a DOWN market”! It is simply the “Law of Supply and Demand”.
There are NOT enough “good” homes on the market for First Time Home-Buyers in Ocean County right now. But, there are PLENTY of “Move Up” homes available! So, a family living in that 3 bedroom Ranch could get a “good” price for their home (provided they purchased it before 2003) and buy that 4 bedroom, 2.5 bath Colonial for a “great” price, with a 30 year fixed rate mortgage, at a historically low rate! Here’s an example of how a “Move Up” Home-Buyer could benefit from this window of opportunity in Ocean County:
CLICK on pictures to ENLARGE!
Slides courtesy of KeepingCurrentMatters.com
So, the “window” is “open”, Ocean County…who is going to “Move Up” soon?