Post Election Mortgage Market Update

Post Election Mortgage Market Update

We have seen a lot of changes in the Mortgage Industry and Housing Market in the last few years, and many of us are tired of hearing about it when we turn on the news.  For those of us who work in the industry every day has been an “adventure”, to put it mildly.  As we have all read, a number of lenders have closed their doors.  Many lenders, with names we all recognize, have “scaled down”, and closed their Wholesale Divisions.  ALL the lenders who are left in the marketplace have changed their underwriting guidelines to reduce risk and eliminate the kind of financing which caused the financial crisis in 2007.  There is no doubt that for many or us it has become more difficult to get a real estate loan especially for those of us who are “self-employed”.  For the “self-employed” all income must be verified for a period of 2 years on their Tax Forms.

Interest rates for “conforming” loans are TERRIFIC.  In fact conforming rates in the days following our Presidential Election reached “new record lows” the likes of which have never been seen before.  Not only are these conforming rates (loan amounts up to $417,000) at record lows,  loan amounts over $417,000  are equally attractive.  Loan limits have been adjusted by county so that limits in “high cost” areas the limits are higher.  We have heard that the rates are expected to be at current levels for the foreseeable future.  This gives hope to those homeowners who cannot refinance at this time.

The Government has initiated programs to assist homeowners who may be “underwater” meaning that they owe more money than their home is worth.  Not everyone in this predicament can be helped, but if their circumstances meet certain requirements help may be available.  The housing market has stabilized and in some areas prices are beginning to rise.  As this rising cycle begins homeowners who are underwater but don’t meet the criteria for help can be encouraged that eventually they will be able to refinance.

Now, more than ever, the services of a Mortgage Broker are important.  It should never cost more than a bank or “online lenders” charge when using a Mortgage Broker, in fact, Mortgage Brokers are often less expensive and can save you money.  They are fully informed as to which lenders are the most competitive in the marketplace, where the best programs are, and where your loan will have the best and easiest chance for a quick approval.

 

Photo Credit: Modify Law Center