Wednesday, February 6, 2013

New Jersey Home Buyers Face Changes in Markets and Mortgages

2013 is presenting a different real estate market and lending environment for home buyers! If you are thinking of buying a home in New Jersey, keep these facts in mind!

First, CoreLogic reports that the New Jersey home market is showing improvement, but of course we still have a wide variety in market condition. Neighborhoods that have good commuter access are seeing more buyer demand and shrinking home inventory. In other areas there is still an impact to home prices caused by foreclosures and the past recession's unemployment trends.

What this means is, there are attractive deals for first-time home buyers in New Jersey, but you need to know where to look. Home inventory is limited, and as we near the spring season, buyer competition will heat up.

Next, there are 3 changes to the mortgage environment in progress, and while these won't be show-stoppers, you need to be aware of them!

1. Mortgage interest rates are trending higher and are expected to gradually climb up throughout the rest of the year. You can watch rates by looking at the weekly rate survey by Freddie Mac; it's at the bottom left of the home page. Please keep in mind that the actual interest rate you may qualify for could be different.

2. FHA-backed mortgages, which are popular for first-time home buyers, have new qualifying guidelines. The mortgage insurance premiums have also increased in cost, and you can no longer waive them as your loan matures. Mortgage insurance covers the lender in case of default. I can refer you to a good mortgage lender who can explain FHA loans in more detail.

3. The new Consumer Protection Act changes the way lenders must look at loan applications. The rules basically abolish the risky mortgage practices that led to the housing crash. Lenders must prove that the borrower has the ability to repay the debt; not just during an introductory interest rate, as in the case of adjustable-rate mortgages, but also through the life of the loan. It means that new ARM loans will be phased out, for all practical purposes. Self-employed loan applicants will continue to face tough criteria. Get used to the picky underwriting process; it's here to stay!

All together, it means that home buyers shouldn't take anything for granted. The markets change, rates change, mortgage rules change. This is why you need expert guidance to help you capture the best opportunities and succeed in your home buying plans!

When you are looking for the ideal Millburn-Short Hills or Summit home, let me be your guide to the market! I have the latest information about home prices, neighborhood trends, schools and more - everything to help you find the best home for your needs!  

As your Millburn-Short Hills real estate professional, I will give you expert assistance with the home buying process from A to Z, from home search, to negotiations and closing. Contact me today, and let my 18 years of experience be your home buying advantage!

Elaine Pruzon
Coldwell Banker Residential Brokerage
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