Mortgage Rates & Rents Expected To Rise In 2013

Mortgage Rates & Rents Expected To Rise In 2013

Whether you are a homeowner seeking to refinance, a homebuyer or a renter, expect higher housing costs this winter.

Certain mortgage fees are rising, especially for those with small down payments. Luckily for borrowers, low mortgage rates are still around, but they only have one way to go this year, and that’s up.

This isn’t the time to wait for a better deal. It’s time to act.

It’s also time to pay close attention to a number of new mortgage regulations that are being released this year. They will help determine who gets a mortgage in the near future.

Homebuyers with low down payments will pay higher mortgage insurance premiums when they get a Federal Housing Administration mortgage.

The FHA says it will increase the annual insurance premium that is added to a borrower’s monthly mortgage payments by 0.1 percent. It may sound like a small increase, but this hike is on top of numerous insurance premium raises the FHA has implemented since 2008 as part of its ongoing efforts to shore up the FHA’s reserves. Industry observers say there’s great potential for much higher increases this year.

FHA borrowers are charged about 1.25 percent of the total balance of their loans per year. Before the financial crisis of 2008, the charge was about 0.5 percent.

Refinancers and homebuyers who have not taken advantage of the historically low rates shouldn’t waste time, mortgage professionals say.

In many parts of the country, rents will continue to climb as the number of available rental apartments shrinks and demand rises.

U.S. apartment vacancies dropped to an 11-year low of 4.5 percent last year’s fourth quarter, according to real estate research firm Reis. Foreclosures, still-tight mortgage lending requirements and a weak jobs market are contributing to the surge in demand and rental prices.

A series of new mortgage and servicing rules is being unveiled early this year. These rules will reshape the mortgage industry and could affect consumers, for better or worse, once they go into effect.

The main rule released so far requires lenders to verify that a borrower has the ability to repay the loan when getting a mortgage. The rule was designed to protect borrowers from the types of risky loans that led to the housing crash.

Read the entire post at Bankrate.com | By POLYANA da COSTA | Updated February 3, 2013

Renaissance Homes is an award winning Street of Dreams custom home builder specializing in green buildingremodeling and renovations for the Portland market. Visit our Design Studio to personalize your next home.

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