August 30, 2018 – Special guest Jolie Davis, NMLS# 1605554, with US Mortgage discusses mortgage updates.
Everyone is discussing if rates are going up. Even if the fed raises the federal fund’s rates, that doesn’t necessarily mean the mortgage rates go up as well. It is not a direct correlation.
The federal funds rate is a short-term borrowing. Ultimately, those costs get passed down to the consumer and there is also a correlation to the market’s supply-and-demand condition. There is a combination between supply-and-demand, in addition to the federal reserve setting the fund rate.
Inventory is low right now, but people are paying back their loans. It is harder to borrow money these days. Five or six years ago, the paperwork was a lot different.
A big topic that keeps getting discussed is if we are in a bubble or not. If we do end up having a downturn, it will be a slower downturn.
Residential and commercial real estate loan default rates were at their lowest points in the recent history of 2004. As 2005 and 2006 came in, we saw a pretty steep increase in the overall default rate in residential mortgages. We are in a healthy market now.
Buyer qualification is federally regulated and lenders are under a very strict mandate on how they can lend money, to whom they lend money and what conditions have to exists. Our market is pretty strong right now.
You need a banker that is willing to get in the trenches with you. Building a relationship with your mortgage lender is an important part of the process.
Watch this video with lender, Jolie Davis, to learn more on what’s going on in the world of finance!