2015 – A New Year for Mortgage Markets and Mortgage Notes
2015 is going be a major year for the housing market according to a recent Trulia survey. Many analysts are predicting a large uptick in the number of first-time home buyers due to a number of trends in the housing and mortgage markets. If all of these expected trends play out in the manner that is to be expected, then mortgage note sellers should probably see higher offers in the coming year.
As we start 2015, mortgage credit is becoming more available as lenders scale back requirements for prospective home buyers. The average FICO score needed in October, 2014 was 754; that’s five points less than it was a year before. This is especially good news for first-time buyers who may not have had as much time to develop their credit scores. The incredibly low 3% down payment option launched by Fannie Mae and Freddie Mac is also a vast improvement for people with limited financial histories. If conventional lenders also jump on the bandwagon, there will definitely be a wave of new first-time home buyers. All of this is good for selling mortgage notes.
Young buyers are the people the market needs right now – and improving access to credit will help them and the industry. However, many experts believe that this trend will be skewed towards areas where the housing market is more affordable. For instance, it’s more likely to happen in the south and west, where the housing markets aren’t as expensive and mature as they are in the northeast. There is also the concern that rising home values and mortgage rates could cause home affordability to decline, but this could be offset by growth in jobs and wages.
This more relaxed lending criterion signifies that an increase in note buying may begin to occur. This is because the primary mortgage market (involving the lending of money to buy homes) and the secondary market (involving the purchase of existing loans) are connected. If there is an increase in the number of buyers borrowing their money from FDIC insured banks and lenders, they will be paying less for their capital, which will most likely translate into higher offers for people who are selling mortgage notes.
If you are holding onto a mortgage note, then 2015 should be a very good year to sell. Call or contact us at Amerinote Xchange to explore your financial options today!