Mortgage rates don't always follow Fed actions.

The Federal Reserve Board left policy rates unchanged at their most recent meeting, as expected. Mortgage rates may not remain steady, though.

Mortgage rates have a mind of their own.

Mortgage rates are based on the demand for mortgage backed securities (MBS). Investors are more interested in what the Fed may do next than what they just did.

The Fed gave us some hints: Probably more hikes to come.

In a statement issued after their meeting, the Fed reiterated their goal of keeping inflation at 2% and affirmed that future actions will depend on economic indicators. However, the majority of Board members predicted higher rates by the end of the year.

Since MBS investors are considering possible future Fed action, as well as other market forces, it's possible mortgage rates will change even though Fed rates did not.

Where does this news leave you?

If you are ready to make a move, we have programs that can help mitigate high rates. Options like fixed rate buydowns, hybrid ARMs and HELOCs can help you move forward with your plans.

If you want to wait a little longer for more favorable rates, this is a good time to start preparing so you’ll be ready when the time is right for you. 

Background on the Fed:

• The Federal Reserve Board (the Fed) controls the federal funds rate and discount rate, which are charges for overnight loans from bank to bank or from the Fed to member banks.
• The Fed has a standing goal to maintain inflation within a 2% range. Over the last year, they hoped to slow spending and inflation by making borrowing more expensive.
• The rate was lowered to near zero in March 2020 in response to the pandemic. These historic measures are now being reversed.
• The Fed raised rates for 11 of the last 13 meetings, with pauses in July and September. The mid-range benchmark borrower cost is currently at its highest level since 2001.

Don't let interest rates hold you back from making a move or accessing cash. We're still closing loans every day!

 

Was your mortgage application flagged when you tried applying? Not anymore!

If you or someone you know has been denied an FHA home loan, your path forward just got easier.  

What changed?

The Federal Home Loan Administration (FHA) has stopped placing a warning flag on applications from homebuyers with prior FHA loan rejections.

Previously, the FHA system flagged a rejected borrower's record for six months. If the homebuyer tried again with another lender, the flag led to a longer, more stringent review or even to an immediate dismissal.

What now?

If you or someone you know has been denied for an FHA home loan, it's a great time to try again. 

What's different about FHA loans?

FHA mortgage programs often allow lower down payment amounts and accept lower credit scores than other loan types.

What are FHA Loans

FHA loans are insured by the Federal Housing Administration. These loans are designed to help first-time homebuyers and experienced homeowners alike by providing them with a low down payment option. FHA mortgage insurance serves as protection for lenders in the event of a homeowner defaulting on their home loan.

How Can FHA Loans Benefit You?

FHA insured loans often give potential homeowners the option of making a lower down payment than they would need to make if using a traditional, non-FHA insured mortgage.

Get Pre-Qualified for an FHA Loan

Now is the time to take advantage of the many benefits FHA loans offer potential homeowners. Plus, it’s now easier than ever to qualify! Our home loan professionals will guide you through the FHA loan process with expert knowledge, competitive rates, and first-class service. Click here to get started with your online pre-approval for an FHA Loan.

FHA Loan Benefits Include: 

• Down payments as low as 3.5%

• Loan is guaranteed by the government

• Less than perfect credit can apply

• Energy-efficient mortgages, reverse mortgages, refinances, and renovation loans also available

How FHA Loans Benefit Everyone:

• They stimulate economic development in the form of expanding tax bases and creating jobs

• They also are beneficial for the economy as a whole

• FHA was created in 1934 as a direct response to difficulties in the housing industry such as unfavorable mortgage loan terms, low rates of homeownership nationwide and widespread unemployment among construction workers

Bottom Line:

Whether you're just getting started or you've been denied a loan in the past, we are happy to help you on your journey to a new home.

Please reach out when you're ready.

 

 

Things are still happening in the housing market. If there’s one thing I want you to learn from this mid-year update on the home financing market, it’s that we’re still here.

Even when the media talks about high interest rates and low housing inventory, we’re still helping homeowners and homebuyers every single day. And we’re here to help you too. Here is our take on where things stand today.

Homeowners
Many of our clients took our advice over the last few years to finance or refinance at historically low rates, and now they are enjoying the ride. Though national home prices fell at the end of last year, the most up-to-date reporting shows them climbing to a new record in May.*

The takeaway – many homeowners are sitting on good rates and strong equity. Greenway Mortgage is helping many access cash from that equity with lines of credit or loans.

Homebuyers

The picture is more challenging for those who hope to buy. Though interest rates are still below the long-term averages, they are significantly higher than their lows. Many U.S. markets are less affordable than their long-run averages.*

Listings are down more than 50% from pre-pandemic levels, so buyers simply don’t have as many choices. There’s hope there, however, as inventory improved modestly in May and new construction is trying to fill in the gaps.* 

The recently released Consumer Price Index shows inflation moderating more quickly than expected. Slowing inflation can be good for rates – and that's good for affordability.

The takeaway – It may be tougher to buy now. Yet you can be assured that if you need or want to purchase, we have mortgage programs that can offset the impact of high rates and help you get the most for your money.

*Black Knight Mortgage Monitor May 2023

Bottom Line:

In all types of markets, the team at Greenway Mortgage remains committed to helping you make the most of your home financing. Any time we can assist you or someone you know, please reach out! 888-616-9885.

 

After 10 straight rate hikes, the Fed held policy rates steady at its recent meeting. 

Is this likely a pivot or a pause?

In a statement issued after their June meeting, the Fed reiterated their goal of keeping inflation at 2%. Though recent reports indicate a slowdown in rising prices, inflation is still above that mark. The Board will continue to monitor economic activity to make decisions on future adjustments, so it's too soon to know what will come next.

Please Note: Mortgage rates are impacted by market forces beyond Fed actions and will not necessarily change at the same pace as the Fed's moves. They often shift before the Fed acts, in anticipation of changes.

Is this the news you've been waiting for?

If so, let's start looking at your home financing now so you can lock in a rate you love when you're ready.

Are rates still higher than you'd like?

Options like fixed rate buydowns, hybrid ARMs and HELOCs can help you move forward with your plans.

Background on the Fed:

• The Federal Reserve Board (the Fed) controls the federal funds rate and discount rate, which are charges for overnight loans from bank to bank or from the Fed to member banks.

• The Fed has a standing goal to maintain inflation within a 2% range. Over the last year, they hoped to slow spending and inflation by making borrowing more expensive.
• The rate was lowered to near zero in March 2020 in response to the pandemic. These historic measures are now being reversed.

Don't let interest rates hold you back from making a move or accessing cash. We're still closing loans every day. 

 

Low income just got higher! Some of our "low income" home loan programs are now available for borrowers with higher incomes.

The Federal Housing Finance Agency (FHFA) just released updated Area Median Income (AMI) limits for 2023 and 2024. Limits increased an average of 7.73% across 95% of US counties. You can read the full announcement here from Freddie Mac.

This change is expected to open the door to homeownership for more borrowers.

Why did the FHA Make This Update to the Area Median Income (AMI) limits?

The primary objective behind this decision is to foster an environment of increased accessibility to affordable homeownership opportunities for a wider spectrum of individuals. Through the elevation of these limits, a larger segment of the population now stands a chance to meet the eligibility requirements for mortgage programs such as Home Possible® and HomeReady.

How Does This Change Benefit Homebuyers?

• It expands the pool of borrowers who can qualify for programs like Home Possible® and HomeReady.

• Allows more people to achieve their dream of homeownership.

• More affordable financing options

• Flexibility for lenders to accommodate a wider range of income levels.

Several government-sponsored loan programs provide preferable terms for borrowers who earn 80% or even 100% of an area's median income. When that income level increases, more borrowers become eligible. These programs typically offer low down payments and flexible sources of funds (including gifts) for both first-time homebuyers and repeat buyers.

Not only does this change benefit homebuyers, but it also provides significant advantages to the housing market as a whole. How so?

• By expanding the pool of borrowers eligible for affordable mortgage programs, this decision ignites demand and leads to an upsurge in homeownership rates.
• The availability of affordable financing options serves as a catalyst for new home construction, thereby revitalizing the real estate sector and enhancing its overall vitality.

How Do AMI Limits Impact Mortgage Eligibility?

AMI limits play a crucial role in determining mortgage eligibility. They serve as benchmarks for lenders to assess whether a borrower's annual qualifying income meets the requirements of specific mortgage programs. By comparing an applicant's income to the AMI limits applicable to the property's location, lenders can determine eligibility.

Are Area Median Income Limits Updated Frequently?

Typically, AMI limits undergo annual updates to align with shifts in the economic landscape and reflect the latest income trends. The FHFA diligently assesses and revises these limits to ensure they accurately capture the area's current median income levels. It is crucial for prospective borrowers to remain informed about these updates as they directly impact eligibility for different mortgage programs. Staying updated empowers individuals to determine their eligibility and make informed decisions regarding their homeownership journey.

Bottom Line:

If you or someone you love has hesitated to pursue homeownership due to low income, now is an opportune moment to assess your eligibility. When you're ready to take the next step, we encourage you to reach out to us. Our team will assist you in determining whether you qualify for a Fannie Mae or Freddie Mac Loan. Don't miss out on the possibility of fulfilling your homeownership dreams – let us guide you through the process.