Well, what to say. I feel like I need to post *something* after a 10 day hiatus.
Alls I have my beady little eyeballs on is the latest mortgage news from Mr Flaherty which again, like we needed it, changes the mortgage game.
2-3 years ago you could buy any property you wanted, rental or not, for 90-100% loan to value (meaning 0-10% down). You could have a 40 year mortgage. You could refinance up to 90 or 95% in some cases. Then things changed and the banks changed and the rules changed. They said 35 yrs was the max mortgage amortization and that's that.
Then last April they said no more of this free lending- we're changing rental properties to 80% loan to value (20% down required) instead of the previous 10% down). You can refinance your own principal property up to 90% not 95% as some lenders were doing. This changed the investing game dramatically for those of us new to it or going through traditional lending avenues.
This March- April we have further revisions. Now to buy a new property, you can still do 5% down, but you cannot amortize longer than 30 years. Refinancing is also being pulled back to only 85% maximum of your principle property. That sucks big time. I've no idea how this will affect purchase plus improvement mortgages (?) but I suspect it will make it tougher to get one and certainly to refinance it. Lastly they took a knife to HELOCs (home equity lines of credit) changing the way they are financed (and I honestly don't know the specifics because I don't have one and don't care)
Apparently the good news of this is it will slow the buying market down, possibly reduce house prices, and certainly make us think first and borrow later. But seriously, by doing this, it sets up the banks so they have more security, which allows them to reduce their risk and raise interest rates, which will further reduce the housing market. Me thinks I may have to secure some fixed interest rates soon before this gets more complicated.
So I dunno what to say. It's the good the bad and the ugly all at once. I'll be able to buy cheaper properties in the future, *if* I can find ways to finance them, and can offset the increased payments due to higher interest rates with good rental income. Argh. Double edged sword. I dunno.... Can I meditate on financial issues?!!!