By Damian Maldonado – CNBC
The housing market has, by many measures, turned a corner. With the potential for interest rates to move higher, there is much to expect in 2015. Here are five trends to spot:
- A last call for refinancing. At its highly anticipated mid-December meeting, the Federal Reserve Board announced it would exercise “patience” when considering raising interest rates. Chair Janet Yellen indicated it would be early April before the board would meet again to discuss an increase in interest rates, meaning that the first quarter of 2015 could signify the end of historically low interest rates. This means the window is starting to close for refinancing. This is the last call for anyone with a higher rate who has not yet refinanced. This is particularly critical for homeowners who took out an adjustable-rate mortgage. Buyers who have been sitting on the sidelines should consider how rising interest rates could impact their monthly payments and purchasing power.
- 3% down payments. If you’re looking to buy your first home and have trouble coming up with a substantial down payment, there are new programs to assist you. In early December, Fannie Mae and Freddie Mac announced conventional loan down payment programs that allow first-time buyers with good credit to qualify for a fixed-rate mortgage with a 3% down payment. There are stipulations to qualify for the program: Borrowers must meet first-time buyer requirements and they must reside in the home. There are many state and national programs which offer grants that range from 1% to 5% to be used for a down payment or closing costs. And remember that smaller down payments mean you will pay mortgage insurance in addition to your mortgage payment each month. These easing loan standards will allow more first-time buyers to enter the market.