There was a decline in mortgage applications last week, but that could soon change.
While today ‘s mortgage rates are still very attractive on a historical basis, it’s hard to forget that they have been steadily climbing since mid – February. In fact, mortgage applications fell 1.3% for the week ending March 5, according to the Mortgage Bankers Association, and rising rates tended to add significantly.
However, there is no reason to think that mortgage applications will continue to fall week over week. Of course, the opposite could happen as the main recording season begins in gear.
Spring could boost inventory
One major challenge that homebuyers have faced over the past six months is the historically low level of homes available on the market. Part of that can be attributed to the health concerns and economic uncertainty posed by the coronavirus pandemic. But also, property listings tend to slow down through the winter months, making it a difficult time to buy.
For one thing, it’s harder to reveal the curved appeal of homes when snow and slush are everywhere. Also, shorter days challenge evening displays – building agents can’t light up the natural light of a home when it gets dark at 5pm
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But once spring arrives, we will see a huge increase in listings as more sellers put their homes on the market. And that could lead to a decline in mortgage applications.
Should you expect to buy a home this spring?
If you’ve been looking for a home in today’s tight market, you may find that you’ll have good luck once in April and May go around. Similarly, if you’ve stuck to house hunting so you don’t have a hard time finding through a narrow harvest, spring may be a good time to look. Even though mortgage rates will continue to climb over the next few weeks, there is a good chance they will remain competitive a month or two from now. And with more investments to choose from, it may be easier for you to get an offer on an acceptable home.
Of course, if you are planning to buy a home in the spring, you need to make sure that you are a strong mortgage applicant. For that, you will want to:
- Good credit score: A score in the mid-700s or higher is ideal and puts you in a good position to take a low interest rate on a mortgage.
- A low debt-to-income ratio: The lower that number, the more confident a lender will be in your ability to repay your home loan.
- A. down payment for your home: A suitable down payment is 20% for a standard loan, although some lenders may accept less. (Other loan products allow you to make lower payments, such as FHA loans.)
- Sustainable work: If you are thinking of changing careers, you may want to wait until you have a mortgage.
There is a good chance that the appearance of housing will be different once the weather warms up. Not only is spring historically a popular time to sell a home, but as more people get vaccinated against COVID-19, things could improve. pandemic side too. As soon as that happens, sellers may be more motivated to list their properties (or welcome buyers into their homes to look around). If you are looking to buy, do what you can to make your mortgage lenders less attractive. That way, if rates go even further, you may still be walking away with a good chance of getting your home loan.