There are many changes going on in the mortgage realm for 2015. Some of them good, some not so good. The FHA monthly premiums for mortgage insurance are down around .50% on a monthly bases for most new FHA loan borrowers. This needed to happen because FHA had become the most expensive loan for mortgage insurance. The conventional markets Freedie Mac and Fannie Mae announced a new program for First Time Home buyers that allows them to get into a house with 3.00% down payment. Home buyers still have to meet all the normal guidelines for conventional lending, including credit scores and debt ratio’s. They also are required to take first time home buyers education class through the mortgage insurance insurer. These are all bright spots for 2015.
Now to the not so bright spots. There are new disclosures that will be required to be used starting for mortgage applications taken after August 1st, 2015. They will replace the current “Good Faith Estimate” of closing costs form, Truth In Lending Disclosure, and HUD 1. These were all part of the Dodd Frank law. The disclosures themselves are fine. However, the closing cannot take place until 3 days after the borrowers have received the final HUD 1 and Truth in lending replacement disclosures. At least for a while I think this will slow up the closing process.
Now on to interest rates. Most economists think that interest rates will start going up in 2015. That hasn’t happened yet, but will probably take place in the second half of the year. The question, of course, is how much and how fast. I personally think it will be gradual and maybe get up to 5.0% by the end of the year. In historic terms that is still very low. So get out there and buy the house of your dreams.