It had to happen, too many home buyers with too little money invested in homes too expensive for their budgets and add to that scenario these home owners bought the homes with short term mortgages. All these items add up to a recipe for failure. So what does this all mean to us in the High Country?
First of all the national mortgage mess means higher mortgage interest rates to all home borrowers here and nation wide. Losses accumulated from those home owners who are not or have not paid the mortgage for which they are responsible have to be offset from other sources. Some of those losses will be made up with higher mortgage rates from quality borrowers. Some of the losses will be made up once the homes in foreclosure are sold, and hopefully sold for amounts equal too or more than the amount owed on them. And finally some of the losses will be written off as bad uncollectible debt by the mortgage investors.
So now that we all understand that a few bad apples did spoil the bunch where do we go from here?
Currently the few national mortgage investors that still have their doors open and wanting new business have tightened up the lending guidelines. Just a few short six months ago if you had average credit scores you could borrow the entire purchase price of a home. Now you will be expected to actually make a down payment of five to ten percent of the purchase price.
In addition to higher rates and higher down payments the short term Adjustable Rate Mortgages that historically had lower interest rates now have higher rates than conventional thirty year fixed rate mortgage. This hurts those who planned to invest in second homes or rental properties as they now have to borrow purchase funds at a higher rate and to offset the higher payments they charge higher rents.
Another happening that is just starting is the rise in the conventional loan limits for conforming loans. It was recently limited at $417,000.00 and now Fannie Mae and Freddie Mac, along with FHA, are allowing non jumbo loans to $729,750.00. This means that higher jumbo rates start at that new higher limit.
By raising the conforming limit, which currently expires at the end of this calendar year, mortgage investors may sell those mortgages as meeting Fannie and Freddie guidelines. As of today, a very few investors have changed their internal conforming limits to that higher amount. And in talking to one national lender earlier today I was told that it is causing a problem as their investors have not accepted the new higher limit.
To compound this fact not every locale in the country will have the higher limit. So if you buy a home in Summit, Eagle or Pitkin counties the limit is $729,750.00. If you buy in Park or Grand County your limit is still $417,000.00.
Now after all of this, and with the changes in the mortgage marketplace that are occurring on what seems to be a hourly basis I suggest that you contact your friendly neighborhood mortgage professional to learn how it all effects you. Get the correct information directly from the head of the horse and you will not end up being the other end of that horse.
REAL ESTATE RESOURCE.
If you would like additional information about real estate in Breckenridge Colorado as well as anywhere in Summit County Colorado contact us at 1-800-791-3990 ext 421.
Jeffery McClintock is a real estate broker in Summit County and prides himself on providing clients with professional guidance in all phases of residential new construction, including market research, product development, consulting, marketing and advertising. His personal mission is to bring to you a level of knowledge, experience, commitment, high standards and results to answer your real estate needs. He believes, the most effective way to provide superior service is to build a strong working relationship with you. His system includes regular consultations and feedback, which is the best tool for identifying and clarifying your real estate objectives and help define strategic solutions.
Jeffery has been a licensed Realtor since 1995. During this time he has successfully closed over 135 million dollars of residential real estate, and 40 million dollars in un-improved land amounting to 660 real estate transactions. His professional experience includes the Denver Colorado front range and the Second Home market in Breckenridge, Colorado located in Summit County.
If you would like additional information about real estate in Breckenridge Colorado as well as anywhere in Summit County Colorado contact us at 1-800-791-3990 ext 421.
So far this season, five people have died in avalanches, one less than the annual average of six. Around the country, 23 people have died since mid-December, surpassing last year’s total and leading to concerns that there could a record number of deaths this winter. 
Yellow or red needles on the entire tree crown. (Needles fade from green to yellow and then to bright red.) Note: discoloration occurs during the year AFTER attack when the beetle has almost completed development. By the time trees appear bright red, the beetles have left to attack new trees.Galleries (tunnels beneath the bark) with beetles, eggs or larvae.“Pitch tubes†— globs of resin on the trunk where beetles tunnel into the bark.“Sawdust†at the base of a tree or in bark crevices. Woodpecker activity, such as holes in the trunk and bark chips on the ground.
