May 8, 2023
Is now the right time to apply for a home loan? Some say no, and others may not have a choice but to start looking for a new place to live due to circumstances (new job, change in family size, etc.) and can’t afford to wait out the current market.
What are these borrowers to do in an era of interest rate volatility?
Mortgage Loan Interest Rates Aren’t Stabilizing Yet
At press time, the financial blog headlines talk a lot about mortgage rate volatility. When rates are subject to change like this, it’s tough to predict how things might go week to week or day. A stable mortgage market is more predictable than what we’re experiencing now.
After 2022, it’s not shocking that the market must experience a degree of volatility as it inches back toward recovery. These periods of instability seem common when they are viewed as a precursor to conditions becoming more predictable.
Is The Housing Market In A Recovery Phase?
At press time, it does not appear that we are moving into a more stable phase where interest rates and other variables go.
But looking at mortgage rate trend history, chances are good the market will recover in a timely manner. We just aren’t sure how long it might take to see the indications that volatility has slowed.
Housing trends are cyclical. The seller’s market of 2022 eventually developed into what we have now, though nobody knew for sure how long that market would take to run out of gas, so to speak.
Best Advice For FHA Borrowers?
Keep moving forward with your plans. But keep your eyes on the market. You’ll want to look for indicators that longer-term conditions are improving.
You may have the best advantage if you are at the start of your homeownership journey and still needs time to save the down payment, work on credit, and get your finances in order.
The time that passes between deciding to buy a home and closing day may bring you closer to a more stable housing market. If you are still in the planning stages of a mortgage, the extra time may benefit you.
If you have to buy sooner rather than later, consider putting in extra effort to improve FICO scores and loan repayment history. Do this as far in advance of a home loan application as possible. The better your FICO scores, the more competitive an interest rate you might be offered.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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