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As we return to a purchase-heavy market with mortgage rates on the rise, it’s more important than ever to stay updated on the latest industry news – especially if you’re in the market to buy. Let’s get right into it and learn more in this week’s Mortgage Monday update!
Rates Update
As expected, mortgage rates are continuing to gradually rise. Freddie Mac reported general increases across the board, most notably in 30 and 15-year fixed-rate options. The average lender is now offering well over four percent for 30-year fixed-rate loans, signaling a return to pre-pandemic times that has been predicted by experts since the start of this year. Last week’s rates ended at levels not seen since 2018 with only further increases on the horizon – but for the immediate future, they are still relatively low in the big picture and favorable for those looking to buy.
The takeaway (which we’ve been saying for a while now) is to pursue financing now. Next week’s rates won’t be the same as what they are today. In fact, they’ll probably be significantly higher. Contact your Total Mortgage loan officer now to get started. Especially in today’s market, being proactive about your future home purchase will result in big savings in the long run.
Older, but Still Important News
Let’s cover some older industry news that has affected buyers since the start of this year.
- For the first time since 2018, the Federal Reserve recently announced that interest rates will be rising by 0.25 percentage points – meaning mortgage rates will also rise – and that future increases will come over the rest of this year with each proceeding Fed meeting (six remain). To prospective buyers everywhere, this should be viewed as a red flag and a sign to follow through with a home purchase sooner rather than later.
- Purchase applications are continuing to overtake refinance applications. And with the Fed applying upward pressure on mortgage rates through the rest of this year, opportunities to refinance will decline accordingly. When rates were at historic lows during the early pandemic, refinancing was an extremely appealing option for homeowners everywhere. Now that they’re back on the rise, though, we’re already seeing the opposite as we return to a high-demand purchase market. If you’re looking to refinance, act quickly and contact a Total Mortgage loan officer now.
- At the start of February, the Federal Housing Finance Agency (FHFA) lifted its restrictions on borrowers with self-employment income. These were originally put in place in response to the pandemic but have since been removed, offering borrowers greater opportunities in an already competitive market. The same credit and income requirements may apply, but home financing is now generally more accessible for the self-employed.
- Coming soon: The Federal Housing Finance Agency (FHFA) announced upcoming fee increases (effective THIS FRIDAY, April 1, 2022) for certain Fannie Mae and Freddie Mac home loans. These increases will ultimately depend on each product’s loan-to-value ratio. “High-balance” loans qualify as any that go above the conforming baseline limit introduced on January 1.
To learn more about any of these recent developments, contact your Total Mortgage loan officer today.
In Closing
Last week’s industry news (and likely all news to follow from this point) should be sending a clear message to consumers to act now. We predict that mortgage rates will continue to rise, creating fewer opportunities to refinance and reducing long-term savings for future borrowers. The sooner buyers act and lock in their rates, the more they’ll save in the long run. Contact us now with any questions and enjoy the rest of your week!
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Source: totalmortgage.com