Sunday, January 22, 2017 - Article by: Net Equity Loans.com -
The overall consensus of the upcoming 2017 Federal Reserve Board meetings is that interest rates will be rising in the near future. It's not all that surprising as interest rates have been at record lows for the last 6 to 7 years. What remains to be seen is what affect the Trump presidency will have on raising interest rates in the next couple of years. The largest market in the homebuying sector is Millenials and rising interest rates certainly don't help the cause, however perhaps a bigger challenge for this extremely large market of potential First Time Home Buyers is the downpayments required to get a mortgage.
Some Factors in 2017 affected by rising interest ratesThe Fed's 3 projected quarter point increases in 2017 will likely stall home values since higher interest rates will most certainly affect borrowing power, and limit affordability for potential home buyers. On the flip side, the new adminstration seems to be all for lowering PMI mortgage insurance premiums on low down payment FHA Loans, which have risen dramatically in the last several years, which should definitely help things. Another factor that comes into play is that more banks and lenders are accepting gifts as downpayments which is a bit of a newer concept. Also the ability for buyers to structure a purchase using sellers assist which essentially lets the buyerfinance their closing costsIn the last couple of years, banks and lenders have gotten a bit less restrictive in their policies and underwritings procedures. After all, they do need to make loans to consumers to make money. We are not predicting a repeat of the mid 2000's when anyone could get a loan. But this responsible loosening should help borrowers in the big picture, even if interest rates do rise, which eventually they will. Our goal moving forward is to educate consumers so they completely understand the process. All in all, with a new presidency comes changes in monetary policy and only time will tell how it will all shake out for the economy, housing, jobs, borrowers, and mortgages.
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