Brenda K. Hughes
Senior Vice President
Director of Mortgage and Retail Lending
To say the mortgage industry has been volatile during the last year would be an understatement. The national and local markets have experienced rate uncertainty as well as there is heightened public concern regarding the affordability of housing. However, there are bright spots and opportunities in the market.
Recently, according to Freddiemac.com, "The U.S. weekly average mortgage interest rate was 1.12 percentage points higher than a year ago." Yet, this average is down from the recent peak seen in November 2022. In this same publication, Freddie Mac also states, "Though mortgage rates are substantially higher than they have been on average over the past decade, from a historical perspective, rates are about average."
The exciting news about today's mortgage market is the broad array of mortgage finance products available to meet the needs of homebuyers. Today, subject to qualifying criteria, consumers may obtain down payment assistance in terms of forgivable grants or affordable seconds. Additionally, there are specialty programs designed for first-time homebuyers, conventional and government-insured loans with limited down-payment requirements, Jumbo loans for homes with a larger purchase price, and reverse mortgage loans for individuals who want to utilize the equity in their home to supplement their lifestyle.
Thanks to technology, the mortgage process has also become more convenient than ever. Homebuyers can now choose the mortgage experience that suits them, from an in-person review of loan options to a fully automated application and loan process. However, technology and ease shouldn't be the only factors when choosing a lender.
Also, keep in mind:
- The programs they offer
- The knowledge of the communities they serve
- A deep understanding of the industry itself
For numerous reasons, a strong community-minded bank should be considered when choosing a mortgage provider. They may have direct access to secondary market investors, which can offer a broad spectrum of loan products. Also, they may have simplified or expanded loan products that can meet a consumer's unique needs. So, a local community bank can provide the lending expertise and opportunities needed, in addition to their well-known personalization and neighborly approach.
Essential to mortgage financing for today's homebuyers is to know and understand individual financial needs and goals. Find a lender who ensures a customer has complete financial understanding and takes the time to review all the existing lending options. Remember, a mortgage is a significant commitment. The right financial institution will not focus on closing a loan but on partnering with a customer for long-term financial success.
Freddie Mac. Economic, Housing and Mortgage Outlook – May 2023. 22 May 2023.