2012 House Prices Set to Fall as Lending Criteria Tightens
Trying to get a mortgage is a major concern among aspiring home owners across the nation and with good reason. The global financial picture is changing, especially for the mortgage lending industry. Even the industry professionals are overwhelmed with the dramatic transformations. The mortgage industry has tried to remain as amiable as possible, but it has no other choice than to go along with the numerous changes taking place with the financial restructuring. As the mortgage foreclosure rates continue to rise, banks are under severe scrutiny and left with no other choice than to become severely strict with their lending standards. In an effort to recover losses from the previous year and to prevent additional ones, mortgages are becoming more costly at an alarming rate.
Mortgage costs can be formulated into three parts, the beginning, middle and end. The basic expenses of a mortgage consist of approximately twenty miscellaneous fees that go towards items like appraisers, clerks, attorney’s, title insurance, inspections, cert’s, doc’s and points. Place them all together and they encircle title work, closing costs and the loan origination affiliated with the beginning of the mortgage. Each year the fees rise and could cost buyers hundreds, if not thousands more than the past years.
Once the mortgage loan has been financed, borrowers are met with continuous soaring expenses like rising interest rates, tax hikes, mortgage loan service fees, increasing home owners association fees, furniture, appliances, handy men, repair service fees, increased expenses for upkeep on home maintenance, escalating home, personal injury, flood, disaster, hazard insurance, and outrageous mortgage insurance premiums to name a few.
The final part of the loan process is also becoming more costly with rising fees for late payments, penalties for delinquencies, hefty legal fees for those entering default, possible liens and escalating costs for refinancing. What this translates to is that stricter lending standards mean mortgages will become more costly and home values will continue to decline. This in turn will make it very expensive to own a home in any market in the suburbs or city across the United States.
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