The term “Non-Qualifying Mortgage” or Non-QM can sound intimidating. At its most basic level, a Non-QM loan is a loan that does not meet the standards set forth in regulatory reform imposed after the 2008 housing crisis. Below we take a closer look at what this really means in terms of risks and benefits for both consumers and lenders.
So far the Fed has increased its benchmark rate three times since the financial crisis as they track economic improvement and attempt to maximize employment and stabilize inflation. If the economy continues to improve, and economic data remains positive, another increase could come as soon as May or June. While consumers with credit card debt may see an immediate increase in interest rates as a result of the Fed’s rate increases, the effect on longer term mortgage loans will be less direct, but still impactful. As RPM’s Julian Hebron explains in an article on Zillow “Even though mortgage bonds represent longer-term rates, these Fed hikes still fuel selling of mortgage bonds, pushing mortgage rates higher.”
Rates began ticking up in the wake of the election and the upward trend is expected to continue, albeit at a slower pace compared to the first few post-election months. If you are currently in the market for a home, you may be concerned about battling increasing prices and upward trending rates. But, you could have the option to tackle affordability by buying down your rate.
First-time homeowners are often younger than the average homebuyer, which means lower income levels, less money saved and, typically, more student loan debt. Concerns about student loans often discourage would-be first-time buyers from pursuing their goal of homeownership. If you’re considering purchasing your first home, these tips can help get you there.
As 2016 draws to a close, it’s a good time to reflect and look ahead to what 2017 may bring. The Trump Administration’s plans to cut taxes and prioritize spending on infrastructure have already started to impact the housing market and mortgage marketplace. Many of the trends we’re already seeing at the end of this year are expected to continue to affect home financing in 2017. Let’s take a look:
The financial markets reacted to the initial uncertainty surrounding the Trump Administration with a post-election uptick in mortgage rates. Despite the recent increase, interest rates are still lingering near historic lows. But, how long will the low rates last? According to a recent Zillow article, “This dramatic rate spike might level off near-term, but don’t count on a reversal back to record lows.” If the economy continues to gather momentum and inflation picks up, chances are good that the Fed will increase rates at the final policy meeting of the year in mid-December. There’s still time to act on low rates before another increase and a rate lock can help ensure that you don’t miss an opportunity! Here’s what you need to know: