2013 has already seen interest rate fluctuations with current rates as low as they have ever been at under 3% for 15 year mortgages and as low as 3.5% for 30 year loans. Lower interest rates mean the opportunity for lower payments or reduce the term of the repayment schedule. For prospective new home owners there is also the option of “more house”, the lower interest rate increases buying power allowing one to qualify for a larger mortgage should you so desire.
Lower interest rates not only stimulate the mortgage industry with many choosing to refinance their loans in order to reduce payments and/or the total amount repaid but it also serves to stimulate the real estate market by helping some who have been sitting on the fence make the decision to purchase a new home. If you are looking for a new home in Myrtle Beach this year here are some of the mortgage changes you need to be aware of when applying for a mortgage.
Due to the unprecedented foreclosure rate and other factors the Consumer Financial Protection Bureau put a rule in force at the beginning of the year requiring all mortgage lenders to take additional steps to make sure that homebuyers have proven ability to repay the proposed mortgage they are applying for. Under the guidelines of the new “Ability to Repay” rule designed to protect consumers from some of the lending practices that created much of the current foreclosure crisis there are certain basic requirements that all new mortgages going forward must comply with.
A large component in this new rule is what the Consumer Financial Protection Bureau calls “qualified mortgages”, under the new rules financial institutions must issue these new mortgages which will be known as Qualified Mortgages (QM) and Qualified Residential Mortgages. The CFPB will also be responsible in large part for deciding the amount of legal liability lenders are subject to when writing loans while many of these more restrictive lending requirements will become permanent.
The new lending standards may make it a little tougher for some potential homeowners to qualify but it is a necessary safety measure to prevent consumers from being saddled with mortgages they cannot afford. The new rates are a great reason to look at Myrtle Beach homes and condos whether for first or second home or for vacation rental property. Beach Realty Group is your Realtor of choice for properties along the Grand Strand and our team members are experts in the area. Give us a call and let us show you the best kept secret in South Carolina.