What About Mortgages?

Mortgage Rates are going up!                                                  

Yikes!  The experts are predicting that mortgage rates could top 5% by this time in 2015.  Some people will always find the bad news in the news.  Depending on how you spin this projection; as a 20% jump in mortgage rates! or as Mortgage rates continue at historical lows! the fact is some home buyers might be suffering a little sticker shock at the closing table next fall.

Many of us who were buying houses in the 80’s at 12 to 16% interest find it interesting how potential homebuyers today anguish over the weekly .2% interest rate swings on mortgage rates.  The rates have basically been between 3.5% and 4.5% since 2011.  It has been a phenomenal opportunity to invest and begin building personal wealth for those with great credit scores.  But even the hint of rising rates should spur some action in 2015.

It’s getting easier to qualify for a mortgage.

As you can see in the chart to the right, the lenders aren’t exactly throwing money at people like they were in 2006.  But the fact is that many more potential home buyers are eligible to borrow much more money than they were just a couple of years ago.  And the FHA qualifying scores are even lower; into the high 600’s.  There is a lot more money available to lend and the lenders are feeling much more comfortable with the new regulations, and with today’s wizened borrowers.   

In addition, just last week Federal Housing Finance Agency Director Mel Watt announced that mortgages requiring only a three percent down payment may soon be available:  “To increase access for creditworthy but lower-wealth borrowers, FHFA is also working with the Enterprises to develop sensible and responsible guidelines for mortgages with loan-to-value ratios between 95 and 97 percent. Through these revised guidelines, we believe that the Enterprises will be able to responsibly serve a targeted segment of creditworthy borrowers with lower-down payment mortgages by taking into account “compensating factors.”

What does this mean to potential home sellers?  

It means if you have been considering putting your home on the market but you have been concerned about whether the time was right or not…Well the time is right, or the right time is certainly just around the corner.  You don’t think all these new home builders have been pouring foundations on a whim do you?  If you’ve been on the fence, get off it.  If you’ve been waiting for that magic moment, get your wand warmed up.  Call a professional REALTOR® ASAP, preferably this guy right here, and tell them that you need to know what to do to get your house ready to sell for top dollar.  Tell them you have 90 days to get it done, and then get it done!

The combination of rising interest rates, more available capital and a huge pent up desire to purchase a home should make for a fantastic 2015.  Be sure you don’t miss it!

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