This week’s Ask Lila is aimed at explaining what reasonable plan of action new home buyers should take as a result of the newly-endangered 30-year mortgage. If you haven’t read Part 1 & Part 2 of this feature yet can read them here and here.

Future of 30-year mortgages at risk? by the FAR blog

Proposals to phase out Fannie Mae and Freddie Mac may make 30-year fixed-rate mortgages harder to find, housing experts say.

An outline drafted by the Treasury Department, the Department of Housing and Urban Development, and the White House and circulated last month calls for winding down Fannie and Freddie over the next five to seven years.

Congress continues to debate the future of Fannie and Freddie, and how and whether it should move to phase out the government-sponsored enterprises (GSEs). For its part, the Obama administration has argued for scrapping the GSEs, but replacing them with some form of federal involvement in mortgage financing.

But housing experts warn that 30-year fixed rate mortgages – a popular choice among buyers – might become harder to find and more expensive without Fannie and Freddie to buy them. Banks may be less willing to extend credit at a fixed rate over such a long term, housing experts note, since investors often prefer loans with adjustable rates rather than loans with longer terms, which expose them to interest rate risk. Read the Full Article

Though the article above doesn’t go on to outline all the faults by Fanny and Freddie (I think those go un-said), it did admit a level of uncertainty involved in completely phasing out The Big Two.

But let’s be real, if the rest of the world can settle for 20-, 15-, and even 10-year standard home loans, why can’t we — the land of the free and the home of the brave — maintain a sustainable economy on such fiscally uncertain cycles?  It would be more than possible to make the conversion, just not as convenient, consumer-friendly or reliable. Just doable.

My point: If you are one of those buyers who are sitting on the fence and waiting for home prices or interest rates to go down, I encourage you to buy a home now.  Interest rates are slowly climbing and due to the recent mortgage crises, 30 year fixed home loans as we know them today, may be a luxury of the past.  The inventory of homes to chose from  in Nassau County, FL is also down 15% from this time last year. The Good News: There are still  30-year fixed mortgage packages available to match your needs

Contact Lila Keim at (904) 753-3944 now to schedule an appointment with a local mortgage analyst and to visit homes currently on the market. Or simply leave your request below.

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