Here’s a look at the latest developments in the mortgage market this week.
- Refinancing just got cheaper. Here’s why.
- Inventory is finally picking up and more could be on the way
- The number of homeowners in forbearance is at a new low
- What is an FHA loan?
Refinancing just got cheaper. Here’s why.
The Federal Housing Finance Agency (FHFA) announced they’re dropping the 0.5% adverse market fee on refinances. It was initially put in place last August to help offset agency losses created by the pandemic, but after a recent change of hands, the decision was made to remove it. That means even more savings for homeowners looking to replace their mortgage.
The fee tacked on 0.5% to the upfront costs of all conventional refinances backed by Fannie Mae and Freddie Mac—two FHFA-run companies that purchase loans from lenders. It was estimated to cost the average homeowner $1400 over the life of their loan. Better Mortgage is proud to be one of the first lenders to implement the change, offering reduced pricing for applicants who lock a rate from July 16th and onward.
With 13 million homeowners already in a position to lower their rate and save, now would be a great time to take advantage of lower loan prices too. Get started by checking out today’s rates, and see how they measure up with your mortgage. If the numbers look good, lock in your new rate easily online. If you’re still on the fence, learn why it can help to lock sooner than later.
Inventory is finally picking up and more could be on the way
The supply of homes for sale remains at a historic low, but homebuyers should be seeing more selection in their search as new existing home listings jumped 4% year-over-year in June. New listings are also up 3% from where they were in 2019, beating pre-pandemic levels for the first time.
The fresh inventory comes as homeowners get more comfortable with selling, and more hopeful about finding a new home to move into. With vaccination rates on the rise, in-person viewings are becoming safer, so increased listings could snowball into more supply on the market as homeowner confidence builds.
If you’re on the hunt for a home today, it’s important to move quickly. Make sure you have everything you need with this 8-step guide to homebuying. It details how to organize your finances, optimize your house hunt, and raise your chances of a winning offer.
The number of homeowners in forbearance is at a new low
For the first time since April 2020, there are less than two million homeowners in forbearance plans. In the first week of July, roughly 189,000 owners caught up on their mortgage payments, leaving 1.86 million, or 3.5% of the country’s mortgages, in forbearance.
Mortgage forbearance is a way to put your loan payments on pause with the approval of a lender or bank. When the pandemic began last year, droves of homeowners took this route in the face of financial hardship, as a way of avoiding foreclosure or delinquency.
The shift is a good sign that the economy is improving, but if you’re having trouble keeping up with your mortgage, you may have other options. Refinancing lets you reset the terms of your home loan to better suit your current financial picture, whether it’s a lower rate or a longer term with lower payments. Learn how to tell if a refinance is the right move for you.
What is an FHA loan?
If you have debt, minimal savings, or a lower-than-average credit score, homeownership is still completely within your reach—and it could be through an FHA loan. The Federal Housing Administration (FHA) is a government agency that offers loans to applicants who don’t fit the requirements of a conventional mortgage. They’re designed with more lenient guidelines, so everyone has a chance of owning a home no matter the size of their savings account. Think you might be a good fit? Read up to find out what an FHA loan is, whether you qualify, and how to apply.
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