Mortgage giants Fannie Mae and Freddie Mac announced recently that first-time Suffolk County NY homebuyers may be seeing a game changer with lower 3 percent down payment requirements. This is designed to expand credit for qualified home shoppers who may have been sidelined the last few years because of higher down-payment requirements.
A recent examination of what's holding back Suffolk County NY homebuyers argues that the down payment is the biggest challenge for first timers.
These loans will meet Fannie Mae's usual eligibility requirements, including underwriting, income documentation and risk management standards. These loans will require private mortgage insurance or other risk sharing, as is required on purchase loans acquired by the company with greater than 80% LTV.
Any Suffolk County NY homebuyers can take advantage of Fannie's loans as long as at least one co-borrower is a first-time buyer.
New Option Not Just for Suffolk County NY Homebuyers
Eligible homeowners who wish to refinance their Fannie Mae-owned mortgage but do not qualify under the Home Affordable Refinance Program can refinance their loan up to the 97% LTV level under a limited cash-out option.
Fannie Mae says it has implemented prudent risk management practices to ensure that loans the company acquires are appropriately underwritten, including mortgages with lower down payments. These include essentially eliminating risk-layering on purchase money loans, requiring income documentation to avoid "low-doc" or "no-doc" lending, and requiring income verification.
Fannie Mae has also worked to provide lenders with greater clarity on what circumstances would result in a loan repurchase request. Some lenders have said that uncertainty around these requests has led to them curtailing mortgage availability. This new clarity is intended to help lenders make mortgages to more creditworthy borrowers.
Similarly, Freddie Mac announced its Home Possible Advantage program, an affordable conforming, conventional mortgage with a 3% down payment to help more first-time Suffolk County NY homebuyers jump into the market.
Get more information about becoming a Suffolk County NY homebuyer and news affecting mortgage rates and qualifications in our section on Suffolk County NY Mortgage Info to your right under Suffolk County NY Real Estate Categories.
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As the year is winding down, some December deals are starting to heat up. But not everything is a bargain. Some things you should definitely avoid buying in December, and some things, depending on when you buy during the month, can be a real bargain…
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According to the latest forecast from Freddie Mac's economists, Suffolk County NY mortgage rates are expected to hit 5 percent for a 30-year fixed rate loan in 2015.
Expect to see interest rates climb throughout 2015, with yields on the 10-year Treasury averaging about 2.9 percentage points, up from about 2.6 percentage points in 2014, and 30-year fixed Suffolk County NY mortgage rates mortgage gradually climbing, averaging 4.6 percent and rising to 5.0 percent by the end of next year.
Rising Suffolk County NY Mortgage Rates May Dampen Affordability
Meanwhile price increases are expected to slow from the 9.3 percent pace we saw in 2013, the 4.5 percent we saw this year, and 3.0 percent in 2015. Continued house price appreciation and rising Suffolk County NY mortgage rates will dampen homebuyer affordability.
Total housing starts in 2015 will increase by 20 percent and total home sales will increase by about 5 percent over that time period to the best sales pace in eight years.
Single-family originations will fall an additional 8 percent from 2014 to 2015 to $1.1 trillion annualized as increases in purchase-money lending are insufficient to offset a drop in refinance. Refinance is expected to make up just 23 percent of originations in 2015.
The good news for 2015 is that the U.S. economy appears well poised to sustain about a 3 percent growth rate in 2015 — only the second year in the past decade with growth at that pace or better. There are several reasons for the better economic performance. Governmental fiscal drag has turned into fiscal stimulus, lower energy costs support consumer spending and business investment, further easing of credit conditions for business and real estate lending support commerce and development, and more upbeat consumer and business confidence, all of which portend faster economic growth in 2015.
With that, the economy will produce more and better-paying jobs, providing the financial wherewithal to support household formations and housing activity. All of this according to Frank Nothaft, Freddie Mac vice president and chief economist.
With the forecast of higher Suffolk County NY mortgage rates on the horizon, there may never be a more affordable time to buy a home than right now. Talk to us about rates, and where prices are for Suffolk County NY housing. We're here to help.
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The burden of Suffolk County NY household costs fell for the third consecutive year, according to the U.S. Census’ 2013 American Community Survey. Nationwide last year, 39.6 million households spent more than 30 percent of their income on housing, which is a decrease from 40.9 million in 2012 and down from the peak of 42.7 million in 2010.
Suffolk County NY household costs are mostly dropping among home owners, while they continue to strain renters, according to a recent analysis by the Harvard Joint Center for Housing Studies of the data. In 2013, 26 percent of home owners were considered burdened by household expenses (i.e.: spending more than 30 percent of their income on housing), compared to half of all renters at 49 percent.
Why Suffolk County NY Household Costs Are Escalating For Renters
The number of renter households is on the rise, which partially explains why Suffolk County NY household costs for renters are escalating. But renters are also plagued by rising rents that are not matching incomes. Median renter costs were up about 5 percent in 2013 compared to 2001, even though median incomes were nearly 11 percent lower, according to the report.
This has led to more renters being severely burdened by Suffolk County NY household costs in 2013, paying more than 50 percent of their incomes toward housing costs. 11.2 million renters were in this category.
The number of home owners burdened with higher Suffolk County NY household costs is dropping. After surging during the housing bubble, inflation-adjusted owner costs have dropped about 2.5 percent below their 2001 level. Owner burdens are also down due to a significant reduction in the overall number of home owners in 2013 than 2012. This decline in the number of home owners for the third straight year suggests that many burdened owners dropped out of ownership, moving into the costly rental market.
Get more timely information about Suffolk County NY household costs and news affecting those costs in our section on Suffolk County NY Real Estate News to the right under Suffolk County NY Real Estate Categories.
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