What Rising Mortgage Rates Mean for the 2023 Housing.
Updated On January 11, 2023 | by Joseph Williams
Two Sides of Rising Mortgage Rates in 2023
Are you still undecided whether you should submit your mortgage application with HomeLendingPal or not? Well, there’s no problem in having such hesitations if you’re still uncertain about your future. You may even be one of those holding back on their loan requests due to the current health crisis we’re dealing with right now.
But experts are now hopeful that mortgage rates in 2023 will continue to rise as the economy opens gradually. It may not be a sudden growth you can expect overnight, but it is somehow significant compared with the unexpected deep that most loan partners suffered from last year. Besides, an improvement will always be an improvement no matter how you see it.
Also See: “Why the Lowest Reverse Mortgage Rates Offer Most Money”
Although, you should always consider the implications of these mortgage updates to both borrowers and lenders nowadays. You may be familiar with some of them, but a review will help you better understand the effects of its rising rates on your upcoming loan request. You can start with its advantages and see if it did any good to the industry today.
The Upsides
There’s no doubt that the continuous increase of global loan rates is one of the best news you might have heard so far. Apart from recovering from the unforeseen 2020 losses, it also shows that lending companies will be back on their track anytime soon! Moreover, expect to observe the following upsides coming along with these recent mortgage developments:
1. Better Economy
Always begin with the immediate reason behind the growth of lending rate offers nowadays: due to the current booming economy. Expect to have an improved economic status once you notice a constant rise in present-day mortgage interest offers. Better grab such opportunities if you want to ride along with this national upward trend.
It can also be a clear sign that the economy might be entering your much-anticipated inflation after a long hiatus during the pandemic. Expect the market to both resume and recover from its previous losses. You may even notice an increase in the number of employees in various industries now that they’re back to their regular operations.
2. Active-Investors
It may no longer surprise you but expect to see investors return to their usual funding practices before the market went to its recent slump. Always look forward to their re-entry to several investment opportunities like the stock market after it bounces back from the previous downturn. Get to see more stockholders actively investing if the mortgage rates continue to rise.
Apart from stock investments, you may also find them exploring different ventures in the market. These include businesses that were already popular before and new ones that are booming nowadays. You may never know; these start-ups might improve the recovering economy further.
3. More Options
Another benefit of these rising mortgage rates in 2023 is the increase of loan offers you can explore with your lending partners. It may be unfavorable with actual lenders since it only means that they have more industry competitors to deal with today. But it can also benefit them once borrowers decide to work on their credit applications again.
It is also advisable for you to take advantage of the rush of these mortgage offers since you might be receiving more than your expected loan. You may even observe an improvement in their credit servicing to ensure your hasty approval any day now. They might even provide your needed funds as soon as you submit them a complete set of their required documents.
4. Lenient Process
More than anything else, expect a more relaxed and more lenient lending process since mortgage companies would want you to get their offers instantly. It doesn’t only assure them of their immediate sales, but it also guarantees them their recovery in no time. Besides, they need more clients like you after their previous business slowdown.
However, always remember that these mortgage rate increases also have drawbacks you should never ignore. These include issues and pitfalls that may hinder you more in applying for your needed loan. Better continue reading through to learn more about these disadvantages you should be familiar with as well.
The Downsides
Some may disagree with it, but there’s also a catch every time these lending interest rates grow constantly. You may argue they’re not that significant anymore since you already expect them right from the start. But it is still a must to learn more about the following downsides to prevent any problems arising once you decide to file your mortgage application soon:
1. Costly Properties
It may no longer be new to you, but always expect an increase in the value of the properties you’re eyeing once your mortgage rates start to rise. No further explanation is needed since home sellers should also make their ends meet after the previous economic crisis. Besides, the recent pandemic lockdowns also limited them from offering their services.
Never forget about the fixed loan rate increases that are common in the market nowadays. Their amount may vary depending on the previous and current economic status. That’s why you should somehow expect more expensive properties if you choose to purchase now during this recovery period.
2. Fewer Remortgages
Are you familiar with refinancing offers from different mortgage companies in the market today? Well, it’s the replacement of your previous loan arrangement with a new one from your lending partner. That’s why it should always be better than your initial loan request to only make the most out of your remortgage application.
So, why would you apply for your refinancing if your loan interest will only balloon up together with the rise of the current mortgage rates? It will not only cost you more, but it will also slow you down in completing your payment obligations. Moreover, you’re also at risk of not paying them as scheduled.
3. Lesser Homeowners
Most importantly, aspiring homeowners are now losing hope to still own their desired properties due to these rising lending interests. You may even stall with your plans since you can no longer afford to pay off your loans with these increased interest rates. Besides, why spend more if you can’t readily afford it in the first place?
That’s why you should always consider both upsides and downsides of these increasing mortgage rates before processing your loan application anytime soon. It would be great to use lending assistance applications like Home Lending Pal to determine whether you can afford to repay your 2023 credit or not.
