10 Jul 08 Buy and Bail: The Updates are in and Changes are Coming SOON!

You need to get out there and buy a new home now!

If you own a home, considered moving and plan on keeping your existing home the new lending rules will make that nearly impossible.

I wrote a week or so ago about this Buy and Bail topic and mentioned that banks had done little in the way of rolling out changes.

UPDATE: CHANGES ARE COMING AUGUST 1^st , 2008!

If you don’t buy your new home before then you will have a new guideline to follow.

30% equity in your existing home!

You read that right!

If you don’t have that much equity then you will have to sell before you can move or you will have to qualify for both mortgage payments regardless of rental income!

Now for you big earners (salary or otherwise) out there this will have limited impact but for those who consider themselves “middle America” this could be a HUGE issue.

It should be interesting to see how this impacts the number of homebuyers in the market because those who own their home and are looking to buy and retain ownership may no longer have that option.

(Side note: I think it’s sad that this rule will force some “honest” people who would truly keep their home, rent it and make the payments to sell their home before they are ready)

BOTTOM LINE: You have 3 short weeks to buy and bail (or not to bail)!

As always, I am here to help so if you have comments please put them below and if you need specific help please contact me via my BLOG www.thelanegroup.blogspot.com

Brent Lane

The Lane Group

Brent@brentlane.net