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Health & Fitness

Getting a Loan for a Laguna Beach home? The Clock is Ticking.

If you plan to obtain a mortgage or a refinance loan for a Laguna Beach home, you better jump. Borrowers have until June 3 of this year before things get sticky.

What I’m talking about is the new lending regulations that will hit the marketplace on that day. You can thank the Federal Housing Administration (FHA) for this gift.  Believe me, if you’re thinking about buying or refinancing a Laguna Beach home, get ready to kiss some of your cash good-bye. These regulations have enough teeth to take a beastly bite out of your personal funds. 

Why This Will Cost You a Pretty Penny

Once June 3 arrives, many borrowers will face two equally unpleasant choices. Either they must:

  1. Come up with a down payment in excess of 10%.  OR
  2. Carry mortgage insurance for the life of the loan. That’s right, the whole stretch.
As many of you already know, mortgage insurance covers or minimizes lender losses in the event of borrower default. Right now, insurance premiums are about 1-2% of the outstanding balance, divided over a 12 month period. Over and done with in only twelve turns of the calendar.But not after June 3. Twelve months then expand to a lifetime. Imagine how that will dig into your pockets over the lifespan of 30 or even 15 years! Do the math. But cover your shriek.  

The FHA is Making Their Struggle Our Struggle

The FHA has been fighting to maintain their required reserves. And the new regulations are designed to help them win the battle. Of course, nobody asked borrowers if this was OK. But somebody has to foot the bill. Why not the very people who keep the real estate gears turning? Borrowers have nothing better to do with their money, right?

Why this is a Horrendous Idea

Extending the life of mortgage insurance is the most ludicrous move imaginable. Buyers are dipping their feet back in the real estate waters again, mainly because lower interest rates and other factors spell great deals. Regulations that make home buying more expensive could trigger a hasty retreat. And that’s the last thing a recovering market needs.No question about it. The FHA regulations give banks another way to fatten up their money vaults. So maybe we all should pounce on B of A and Wells Fargo stock. Believe me, once this new mortgage thing gets rolling, their stock will hit the moon.

What You Can Do About It 
  1. Sound off in our comment box. The louder, the better. Remember, your opinion counts.
  1. Beat the June 3 deadline. We’ll even help you do it
Just contact the caring professionals at The Coastal Property Experts to schedule your complimentary consultation. We promise you’ll get what you want in the Laguna Beach real estate and Orange County real estate market…much sooner than you think. 

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