New Rules May Inhibit Home Purchases

Regulators are proposing a rule that would require a buyer to make a 20 percent down payment on a home in an effort to create loans that are safe investments for the secondary market. The problem with this strategy is that it may make 60 percent of potential buyers ineligible for a mortgage.

The resulting reduction in potential buyers could seriously inhibit economic recovery, as home purchases are a key component of the economy. Some believe this rule will make a bad situation worse in regards to the housing market. Others believe that the rule is needed to ensure that lenders retain an interest in making mortgage transactions. Some also believe that the rule will ensure that mortgages are made to families that can actually afford them.

SOURCE: Middletown (OH) Journal

URL: http://www.middletownjournal.com/news/middletown-business-news/get-ready-to-rent-if-home-buying-rules-change-more-than-half-cant-afford-it-1244656.html