December 19th, 2013
This week’s FOMC meeting has adjourned with no changes to key short-term interest rates, as expected. However, it did bring an announcement of the first reduction in the Fed’s current bond buying program. They announced that the current pace of $85 billion in monthly purchases of government and mortgage debt would be reduced by $10 billion starting next month. This move wasn’t exactly expected at this meeting, but didn’t surprise some traders and market analysts. It was bound to come sooner or later and it turns out sooner was today.
The average number of mortgage applications fell 5.5% on a seasonally adjusted basis as interest rates generally increased compared to the previous week, the Mortgage Bankers Association said Wednesday.
“Both purchase and refinance applications fell as interest rates increased going into today’s Federal Open Market Committee meeting,” said Mike Fratantoni, MBA’s vice president of research and economics.
Most people believe the real estate “deal” is negotiated and completed at the signing of the contract. By that point, the counteroffers have been made and the back and forth has happened, so it’s easy to assume that the deal will go on auto-pilot until closing.
The reality, though, is that in many cases, the deal-making and negotiations only start at the contract signing. Even in more competitive real estate markets, negotiations still happen once in escrow.
Zillow’s blog has these areas for you to consider when ti comes to negotiation:
A word of caution: You should never complete the original contract assuming that you can negotiate more as a result of the property inspections
“You’ve heard all the stories about how difficult it is to get a mortgage and all the documentation required — there’s going to be a lot more of the same,” said Ron Haynie, senior vice president of the Independent and Community Bankers Association.
A lot of new mortgage regulations will take effect between Jan. 10 and Jan. 20, 2014. The most noteworthy of these for borrowers is the ability-to-repay rule and the qualified mortgage (QM) rule, which together establish new standards and practices for mortgages that lenders must follow.
Bob Davis, vice president of the American Bankers Association, estimates that 20% of people who could obtain a mortgage in 2013 will not be able to get one in 2014.
The QM Rule prohibit a number of mortgages that were generally bad for consumers, including “balloon,” interest-only and negatively amortizing loans. The new rule also limits the “points” to 3.
So call a reputable loan officer if you’re thinking about getting a new loan or refinancing. Talk with them about your situation and your goals. They are dedicated to following the markets and all of the loans being offered.