Are Mortgage Rates Recovering?
One financial pundit talks about recovery, while another warns there is more financial back-and-forth to come. In the second month of the second quarter of 2023, we’re not too far away from the time some predicted (back in winter 2022) that we’d be entering some kind of recovery phase. What’s the reality?
Mortgage Rates Are Volatile
The period we are in at press time seems more subject to the whims of the market than usual. We experienced a similar period of time back in the recovery period after the 2008 mortgage crisis.
Borrowers weren’t sure if the market had recovered or whether there was more uncertainty ahead.
But the reality of that situation, and the one we find ourselves in now in 2023, is that the market must experience a degree of volatility as it inches back toward a recovery.
What we are in now is most likely NOT the recovery but the volatile period between the extreme of the recent past and the more settled version of the mortgage market yet to come.
And it WILL come. Housing trends are cyclical. Notice how the seller’s market of 2022 eventually morphed into what we are seeing now? Nobody could tell (as usual) specifically how long that condition would last before it started to change again. And change it did.
The Advice for FHA Borrowers?
The best advice for an FHA borrower looking to buy or refinance is simply to keep moving forward with your plans but with an eye on the markets starting to improve slowly over time. Who might have the biggest advantage with an FHA mortgage in the current mortgage climate?
Someone at the start of their homeownership journey and still needs time to save the down payment, work on credit, etc.
Why do these borrowers seem to have a head start? Because it’s entirely likely that between deciding to buy a home and actually signing the papers, these borrowers will witness mortgage rates getting closer to five percent than they were six months ago.
That’s assuming that a third-quarter recovery or something that looks like it actually happens in the next five months. If you are still planning a mortgage, you might benefit from the extra waiting time.
Those who have to commit sooner rather than later can help themselves by working to improve FICO scores and loan repayment history well ahead of a home loan application. Remember that the interest rate you are offered depends at least in part on your FICO scores; don’t apply for new credit without working on them ahead of time.
Home Equity Can Secure Your Second Mortgage
Consider the Advantages of Discount Points
FHA Limits are Calculated and Updated Annually
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