Vol 15 edition ix
There is one constant that you can be sure of and that is change. Most people in this business are bracing to see how the replacement of the HUD -1 with the Consumer Financial Protection Bureau’s (CFPB) new condense form of two page from four pages. The Loan Estimate and Closing Disclosure.
Buy your plywood now there’s a change in the air, and a storm is on the way. The Federal Reserve held their position this week but will meet again in six weeks. A rise of .50 basis point is on the way, and the banks or pushing for it. This translate into fewer pre-qualifiers, Stagnate home sales and increased rental rates.
For example, in May, the average loan with a 30-year fixed-rate mortgage was $231,000 at a 4.03 percent average rate, which carried a monthly payment (principal and interest) of $1,107. However, that same loan amount at a 4.53 percent interest rate would jump the monthly payment to $1,175 – a 6 percent increase, according to realtor.com®’s analysis.
What’s more, realtor.com® predicts that higher rates will prompt as much as a 7 percent rejection in mortgage applications. “Based on analysis of loan-level ratios for a large sample of loans approved in the first half of this year, as much as 7 percent of mortgage applications would have failed to get approval as a result of higher debt-to-income ratios caused by higher rates,” Smoke says.
First-time home buyers may be particularly hard-hit, as well as high-cost areas.
What’re your thoughts…?
Michael Gould –e 21 Realty