New Year 2014

Happy New Year to everyone.

Here we go again, changing the date on our paperwork. You know that most of us by the 5th of January will have written ‘2013’ on a check or some other important document where we just can’t scratch out that date forcing us to just have to start over.

Starting over is not anything new, but this New Year it’s going to be very different. The housing market has been slowly increasing with many investors buying up the lower price housing market.

These investors are looking to cash in on the rental market as more than half the people in Florida cannot purchase a home do to past credit issues or low income. Therefore they are renting and are paying a much higher rent then they would be paying for a mortgage loan on the same home.

Let’s take a look at a $150,000 home, a mortgage payment including taxes and insurance may run about $950, That same home rented will have a lease payment of $1400 to $1600. This may help explain why only about 28% of the homes in 2013 were purchased with a mortgage loan. The cash investor have purchased most of the homes that normally a first time home buyers would be able to purchase.

The laws of supply and demand have forced home prices up well over 20% in the last two years, leaving little choice for the lower income buyer.

Looking forward to January 10th 2014 when the new lending regulations kick in the first time home buyer and those with incomes of less than $50,000 a year are going to find it very difficult to attain a new mortgage loan if they can at all.

In an attempt to help the consumer by controlling cost with caps on expenses surrounding a home purchase with a mortgage loan, the government imposed restrictions on the lending industry have left little or no choice for those looking for a mortgage loan under $80,000.

The overall combination of ” QM and the Ability to Repay Rule”, Health Care, and the raising of the minimum wage actually has a negative effect on those first time home buyers and lower income people.

If you’re thinking of purchasing a home or even if you have plans to just doing a simple refinance on your current mortgage loan you may want to review your over debt picture and see which debts you can pay off before applying for the mortgage loan. This will help improve your debt to income ratio possibly qualifying you for a lower rate.

So for the New Year let’s pay down our debt and save more money.  Good luck and Happy New Year

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