Come April 19, new laws will kick in designed to cool down the housing market. This is one good move by the feds. Record low interest rates made it easy for many to purchase rather than rent. Indeed this has been a factor for a consistent multiple-offer situations. Here is what this new law dictates:
- Buyers must qualify for a fixed 5 year rate, they can opt for a variable rate. Currently mortgage qualifications are on a fixed 3 year term.
- Refinancing limit of 90%. This is excellent as it will force home owners to retain some equity in their homes.
- Purchase of a property other than for personal use will need a 20% down payment. Not the current minimum of 5%.
On the whole these new laws are good for the long haul. Home buyers must be aware of the fact that eventually the interest rates will go up.
