At Altius Mortgage and our partners at Mortgage Ogden, staying on top of housing trends is one of our many points of pride. Our clients need experts with a current view of the mortgage world, plus an idea of how the market will move going forward.
This is especially important for the first time home buyer, who hasn’t navigated any of these common issues before. With that in mind, let’s get into part one of a two-part blog series on several 2018 housing trends that are looking likely, and what they might mean for you as a first time home buyer.
Debt Limits Going Up
Back in July 2017, government-sponsored Fannie Mae announced it would start accepting borrowers with a debt-to-income ratio of 50 percent, up from their previous limit of 45 percent. Debt-to-income ratio refers to how much of your monthly income is tied up in various forms of debt, and lighter standards here mean more people will be eligible for basic mortgage loans.
Prices Still Rising – But Slower Than Before
As expected, home prices will continue to rise in 2018. But this is normal, and the larger factor here is actually the rate of this growth, which will actually be slower than usual. Most experts expect home prices to rise by about 3.5 percent this year, and up to 5 percent in some places. While this is a slow-down on increases from prior years, know that it can still affect your buying power.
Qualifying is Getting Easier
In multiple areas, mortgage lenders are making it easier to get approved for a loan. Areas like down payments and maximum debt levels have allowed easier access for a larger portion of the population.
Down Payment Numbers
In the past, it’s been considered standard that you need 20 percent of the total purchase price saved up to put as a down payment. Today, however, there are numerous down payment assistance programs that can help you lower your down payment as low as 3 percent, or even less for military members or veterans.
Rates Expected to Rise
Do know that mortgage rates are expected to marginally rise in 2018. Rates are expected to climb just above 5 percent during the back half of the calendar year, something buyers should keep an eye on.
For more on mortgage trends for first time buyers, or to learn about any of our mortgage services, speak to the pros at Altius Mortgage today.