Federal Reserve & Bond Rates Impact
Increase in both rates and bonds can have a large impact on your portfolio and income.
The True Return of Subprime
Who Really Needs It?
Millennials, the largest home buying cohort today, have much higher levels of student debt than previous generations. Members of older generations who went through foreclosures during the housing crisis or other hits to their credit are still struggling with lower FICO scores.
The More Buyers In The Market .. The More The Economy Moves Forward
"From January to July 2017, Fannie purchased 80,467 loans with DTI ratios between 45 and 50 percent. But from August 2017 to February 2018, Fannie purchased 181,911 loans in the same DTI bucket. This increase of more than 100,000 loans in just seven months exceeded our estimate (85,000 additional Fannie loans annually) and Fannie's expectations." – Urban Institute
10 Year Bond Heating
Very lean supply and outsize demand are keeping home prices booming — especially in the strong economies of the West and other areas scarred by the housing bust.
As Prices Rise, There Needs To Be Easier Qualifications For People To Buy More
Because of the current market, the recommendations are the following;
- If you have not conducted a refinance in 2018, do so before Q3/Q4 as more than likely rates of bonds and Federal Reserve will increase.
- If you are building or growing your portfolio of businesses or real estate. You also need to finalize your purchase and qualification/approval process before Q3/Q4 because at that point the cost of money will be higher.
- Most High Net-worth Individuals have a ARM (Adjustable Rate Mortgage) because their loan amount exceeds the normal FHA requirement. Now is a good time to refinance or buy down the existing rate before the ARM flex(increases with Bond Rates).
- Look forward to a increase in lending opportunity for commercial real estate in the future.
- If you're aggressive, now is the time to strategically acquire investment real estate, with lower requirements such as income and FICO/Credit Score.
- Look for options to buy down your rate so that a rate increase will not kill you.
- Stock portfolios will take a hit.
- If you're already pre-approved, you want to move quick to a close before you have to undergo a new underwriting process which will increase your rate.