It goes without saying that buying a home is one of the major decisions of our lives. For us home is more than just a piece of shelter; it is all about home in where the heart is – a place where we create treasured memories. Not only so, it is also about the reflection of our personalities.
And dealing with home loans is definitely not an easy task. In 2014 with mortgage rates going up considerably, things are expected to tighten up all the more. According to experts, mortgage loans are expected to increase by 9% this year. So, as there are numerous buyers, but despite that why is the mortgage industry tightening up so much; now one of the main causes for tightening up of the markets are a shortage of homeowners.
Mortgage Loan Market in 2014
However, it is not only the marketplace circumstances that will have a marvelous impact on the mortgage business, 2014 is bound to record a higher percentage on interest rates and even more rigid credentials for those who wish to apply for mortgages.
Experts from the industry opine that, changes in policies will make the mortgage market more rigid and one of the biggest constraints would be the 43 per cent rule. But refinances are expected to be more affected than any other segment.
Not only so, buyers will encounter a lot many changes in mortgages this 2014; one of the major changes being the Convention Qualified Mortgage Rule. This particular rule is known as the QM rule in the industry. This happens to be an underwriting protection for lenders who intend to follow some more strict guidelines. The fees that these lenders charge may not exceed beyond 3 percent of the entire sum of the Qualified Mortgage. Some are of the opinion that depending upon the structure of the fees, choices of consumers might be limited. However, it is good to keep in mind that mortgage interests might raise to at least 5 per cent by capping fees.
Changes in the 2014 Mortgage Market
2014 is predicted to be an outlandish year especially for the mortgage industry and appears to be full of contradictions; but some of the basics of economics are at play—demand, supply and regulation.
If there is a lower housing inventory, the complete amount of dollar of mortgages might decrease, but this does not imply the same for mortgage rates.
Private lenders are expected to return to the real estate market and as mortgage numbers increase, rates are also expected to rise. 5 percent is still considered a low rate and might not be luring enough to keep up buyers’ interest. Homeowners strictly holding on to their property can choose to sell off their properties as the market prices increase.
Lenders are expected to carefully counter mortgage documents that will enable them to insure that they follow proper lending practices. Verification of income and reliable sources of down payment are also scrutinized.
Mortgage Tips for 2014
While new introductory rules are being introduced, they are expected to make things a little more difficult for potential borrowers; now borrowers who are of the low-income group are likely to face some more tribulations. But as there are tough times coming up, there are chances of regulating and managing well with the tough situation. Some of the significant tips to consider as major mortgage tips for 2014 are:
- Do some proper shopping for your mortgage
- Get in touch with a mortgage broker or realtor for some good recommendations
- Do a proper research work, prepare your documentation before you apply—have all your tax returns, payroll standards, bank statements.
Mortgage loan is a commonly borrowed loan and will continue to be in as much demand in 2014.
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