The year end for 2013 is a good time to take a closer look at where the residential mortgage rates will be in 2014. Well, if you are in the market to purchase a home the year should be a mixed blessing with some good news and bad news.
Good News: Good news about residential mortgages in 2014 is that the lender will be relaxing their lending standards, but only for the highly qualified and wealthy borrowers.
Ms. Lantz expects some modest easing in requirements for minimum credit scores, maximum loan-to-value ratios, and debt-to-income ratios. “Lenders will look for where they have room to widen these guidelines conservatively,” she said.
Regulatory guidelines that take effect in January will set parameters on how much easing lenders can do without straying outside the government’s “qualified mortgage.”
Yes, there will be nothing for the 99% of us average borrowers.
Bad News: The bad news about residential mortgage in 2014 will be the certain rise of these rates specially given the FED’s plan to stop the purchase of mortgage back securities.
Erin Lantz, the director of mortgages at Zillow.com. She predicts 30-year fixed-rate loans will hit 5 percent for the first time since 2010. That’s still historically low, and rising rates are a sign of a stronger economy.
“Higher rates would go hand in hand with higher employment, increasing incomes — changes that are increasing household purchasing power,” said Jed Kolko, the chief economist of the real estate website Trulia. Ms. Lantz expects some modest easing in requirements for minimum credit scores, maximum loan-to-value ratios, and debt-to-income ratios. “Lenders will look for where they have room to widen these guidelines conservatively,” she said. Regulatory guidelines that take effect in January will set parameters on how much easing lenders can do without straying outside the government’s “qualified mortgage.”
Say What: One new options that should get a lot of traction is the return of the Adjustable Rate Mortgages which fell out of favor during the Real Estate market crash of 2006. Flexible Mortgage rates will help with the qualification given the rising interest rate climate. The other mortages that should make a come back are Cash Out Refinancing specially given the continued increase in home values.
Tell us what you think about the mortgage rates in 2014. We would love to hear from you.
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