Interest rates recently rose slightly, raising the question of what affect they will have on Columbia SC mortgages. Rates increased for the first time in more than two months, creating a sell-off in the U.S. Treasury bond market. Mortgage interest rates have traditionally been tied loosely to the 10-year Treasury bond yield. While the increase in interest rates was only .125% (1/8th of a percentage point) the uptick was enough to adversely affect stocks in the nation’s homebuilding industry.

Despite the impact the interest rate increase had on Wall Street, its relationship to Columbia SC mortgages is expected to be minimal. Let’s take a look at the various forms the rate rise will likely have throughout the nation. Historically, a slight uptick in interest rates – if anything – has signaled the end of rate drops, causing prospective home purchasers to finally make a move to buy before rates go even higher. When rates are low and could be expected by some to inch even lower, potential homebuyers often wait in the wings for rates to get even better before they decide to buy.

A mortgage industry spokesperson said that when rates move upward – even the slightest amount upward – there is always room for concern. He called the interest rate increase “a serious threat to low, stable mortgage rates until proven otherwise.” Mortgage interest rates have been at near-record lows for most of the summer, so it’s likely that a movement upward has raised more than a few industry eyebrows – especially among those in the business of making Columbia SC mortgages.

Regardless of the amount of the increase, the simple truth is that higher mortgage rates add to the already-expensive cost of home buying. As mentioned, the rate rise could push some homebuyers into action as they scramble to buy before their costs rise. In addition, higher interest rates may startle some sellers into cutting their asking prices in an effort to offset the news. It’s one of the few ways sellers can combat the chance of losing interested buyers.

What it means for homeowners with existing Columbia SC mortgages is this:

It may finally be the time to refinance. Despite interest rates being low for months, experts say there are hundreds of thousands of borrowers who have procrastinated or otherwise not refinanced.

If the Federal Reserve decides to raise its funds rate at their next meeting, mortgage rates still may not move much higher. Remember, when the Fed made its first increase last December, mortgage interest rates only increased slightly and then leveled off just as quickly. Industry insiders familiar with Columbia SC mortgages say the longer-term rates such as 10-year U.S. Treasury yields and mortgage interest rates do tend to move with expectations of Federal Reserve rate increases – not the Fed’s actual decision to hike rates. The experts use December 2015 as their most notable example. The Fed increased their rate slightly and mortgage rates dropped. Why? Because the market had spent much of the preceding period in anticipation of a rate hike by the Federal Reserve. In this scenario, the threat or expectation of an interest rate increase caused less concern than when the actual increase occurred. Therefore, the market adapted ahead of time to whatever interest rate changes were headed its way.

Let’s assume rates on Columbia SC mortgages rise slightly in the expectation of a Fed rate increase. Historically, there has been a remote chance that mortgage rates would move a full point upward. Need more reassurance? Mortgage rates have only increased by .5% (or half a percentage point) 14 times in the past 45 years, according to a report issued by John Burns Real Estate Consulting. The firm further predicts rates will stay below 4% through 2018. Burns had this to say about the effects that interest rate increases on Columbia SC mortgages will have on various segments of housing. “Historically, they have hammered builder stocks, hurt new home sales bad, hurt existing home sales a little, and had very little impact on home prices unless there was a recession too," noted Burns. "My conclusion is that investors are right to punish the stocks, but often punish them too hard.”

In addition, most experts say that even if rates were to make another move upward, the housing market has bigger issues to worry about. Supply is still a major consideration, and the lack of homes for sale continues to move home prices higher and higher, adversely affecting affordability for most Americans – a problem that is more severe than slightly higher mortgage interest rates. While homebuilders work hard to increase production, they are doing so in the face of rising costs for developable land and higher labor costs. Plus, intrusive construction regulations and restrictions have made homebuilding more challenging than ever.

In conclusion, nobody likes to see interest rate increases – especially among Columbia SC mortgages – but the resulting impact will probably only hurt the housing industry minimally, at best. Interest rates have been very low for a long time, and there’s little reason to think that increases – even if they do occur – will be large enough to make a difference in the housing market. The additional principal and interest payment that even a 1% increase would have is less likely to prevent buyers from staying put in their existing homes or for renters to continue to pay rent at ever-increasing rates. Simply put, as is the case with many movements in the marketplace – interest rates among them – the effects vary from situation to situation and market to market. Furthermore, for purchasers who have their eye on moving out or moving up, home prices are far more likely to get their attention than small increases in rates affecting Columbia SC mortgages.

You can find more articles pertaining to Columbia SC mortgages and the overall mortgage market in the Columbia SC Mortgage Info section of our site below Columbia SC Real Estate Categories in the column to your right.

We also post tips daily tips, many of them related to Columbia SC mortgages, on Facebook and Twitter and would love for you to follow us there as well.

Columbia SC mortgage rules may be about to take a big change, and the jury is still out as to whether it could be bad for the mortgage industry in the long haul.

If changes announced recently by Fannie Mae catch on, the process of having to fork over your pay stubs could go the way of 8-track tapes and cassettes.

Need a Columbia SC Mortgage – Fannie Says Forget the Pay Stubs

Fannie Mae announced recently that it would allow lenders to use employment and income information from a database operated by credit bureau Equifax to verify borrowers’ creditworthiness rather than requiring lenders to rely on collecting physical copies of pay stubs and tax data, which has been the time-honored tradition when trying to buy a home.

Other Columbia SC mortgage rules may also be changing with the intent of broadening mortgage access for some borrowers. Fannie said it will ease the lender process for granting loans to borrowers who don’t have a credit score. Later in mid-2016 Fannie Mae will also require lenders to begin collecting "trended" credit data from Equifax and TransUnion, which includes longer-term borrower credit histories.

The extra information will help Fannie see if borrowers are paying off their credit card bill every month or just making the minimum payment or if they’re letting balances rise. Borrowers who are making the full payment could see perks then.

Some minority groups have had a hard time obtaining loans in recent years, in part because those groups also tend to have lower incomes or less money for a down payment but also because they sometimes don’t have traditional credit histories. The new Columbia SC mortgage rules are designed to hopefully change all this.

Advocates and industry groups have been pushing the Federal Housing Finance Agency, which regulates Fannie and Freddie, to allow the companies to use alternative credit-score models that take into account utility or rent payments for potential borrowers who may not have a credit score. Borrowers who have a traditional score calculated by Fair Isaac will still need to meet the 620 minimum, on a scale of 300 to 850.

Stay tuned, we'll keep you up to date on these potential new Columbia SC mortgage rules and how they may affect the Columbia SC home buying market.
 

The number of delinquent Columbia SC mortgages continues to fall, but the foreclosure crisis is still taking its toll on thousands of borrowers locally, and hundreds of thousands nationwide.

Nationally, of the approximately 952,000 borrowers who are 90 or more days past due on their monthly payments but not yet in foreclosure, 62 percent have already been through some form of home retention program, according to Black Knight Financial Services. They are, it seems, beyond help. Home retention programs were established by lenders and the government to work with borrowers to enable them to keep their homes.

In 2010, homeowners on average could have received a $530 monthly payment reduction. That has dropped to a $450 range today.  Larger payments are now looming for many people who participated in federal mortgage relief programs and for many who took out home equity lines of credit before the housing crisis.

Banks More Aggressive With Delinquent Columbia SC Mortgages

Banks are getting more aggressive in pushing delinquent Columbia SC mortgages through the foreclosure process, rather than offering more modifications. As home prices rise and demand surges, banks can sell the homes more easily in today's market than they could during the height of the foreclosure crisis. Retention actions are down 42 percent over past two years, but of the new modifications or payment plans, 70 percent have already been through one or even more modifications that failed.

Banks are also favoring short sales more, rather than taking the home to final foreclosure and selling it. A short sale is when the bank allows the home to be sold for less than the value of the mortgage.

The ongoing shift away from final foreclosure sales is a driver of improving home prices since bank-owned properties typically sell at a larger discount than short sales. Distressed homes accounted for 12 percent of March home sales, down from 39 percent at the peak of the foreclosure crisis.

Although the number of both delinquent Columbia SC mortgages and those in active foreclosure is down dramatically, they are still two and three times their precrisis norms, respectively,

Find more articles pertaining to delinquent Columbia SC mortgages under our Columbia SC Mortgage Info to your right just below our Columbia SC Real Estate Categories.

We also post tips on Facebook and Twitter. Follow us there for many other mortgage related tips as well.

The Federal Housing Administration (FHA) is exploring alternative credit scoring models for those seeking Columbia SC mortgages. The alternative credit scoring models could expand access to mortgage credit for responsible borrowers who may have thin credit histories or extenuating circumstance like medical debt.

Many Unable to Obtain Columbia SC Mortgages

Due to restrictive lending many of the qualified Columbia SC borrowers are not able to enter the housing market because they can't get Columbia SC mortgages.

The National Association of Realtors (NAR) first called on federal regulators and the credit and lending communities in 2011 to reassess the entire credit structure and look for ways to increase the availability of credit to qualified borrowers who are good credit risks.

Work by the Harvard University Joint Center for Housing Studies indicates that borrowers with lower incomes as well as minorities face higher rejection rates on applications for Columbia SC mortgages. A NAR analysis of mortgage data from 2007 to 2013 indicates that the share of rejected loans due to credit scores was significantly higher for African Americans and American Indians.

The newer credit scoring models put less emphasis on the impact of unpaid medical bills, and the effect of missed payments on debts that have subsequently been paid off is eliminated. FICO 9 and VantageScore 3.0 incorporate public utility and rental housing payments, information that helps lenders to evaluate younger persons and minorities who might not have a history of credit use. FICO estimates that its new model could improve scores by 25 to 100 basis points.

The biggest limitation to borrowing is tight credit standards. These conditions are exacerbated by outdated credit scoring models that don't take into account the unique spending and savings patterns of Hispanic borrowers. Alternative credit scoring models need to consider these patterns so creditworthy borrowers are not turned away from obtaining Columbia SC mortgages, and along with that, the American Dream of homeownership.

We will keep you posted right here on our website about this potential change in scoring by the FHA, and how it may affect those trying to get Columbia SC mortgages.