Helping Your Borrowers Navigate Interest Rate Fluctuations
Chances are, you’ve heard from clients who are concerned about fluctuating interest rates. Signals from the Federal Reserve tell us we’ll likely see incremental increases over 2022. And possibly some decreases. Your customers need help from a steady hand as they traverse this shifting terrain.
Don’t Count on Global Events
Today’s geopolitical turmoil and the supply chain it affects have added a level of uncertainty to the U.S. economy. Historically, the Fed reacts to these global issues by lowering the cost of borrowing. But few economists see that happening this time around; the risk of rising inflation is too great. So, while global events may have a ripple effect, don’t bank on them significantly or sustainably lowering interest rates.
Do Expect Moderate Changes
While we did see mortgage rates dip as February came to a close, most experts view that as an anomaly. Rather, rates are expected to go up over the course of the year. But moderately. Most forecasters see a modest rise in mortgage rates, with overall improvements in the economy and positive U.S. employment numbers serving as a balance against rising inflation. So 2022 will still be a good time for both new mortgages and refinancing.
In uncertain times — and these days are certainly that — peace of mind can be just as important as marginal changes in interest rate percentages. You would do well to remind clients that today’s interest rates, even with the incremental rises of late, are historically low. Looking at the news, current events, and daily forecasts in planning financial moves can be unnerving. Instead, it’s better to consider today’s attractive mortgage rates in historical context: things are pretty good for borrowers right now.
Do Lock in a Good Rate
When the winds of change are swirling, a pragmatic approach usually works best. So locking in a mortgage rate rather than hanging back to see how things go is often advisable. Clients looking to purchase properties would do well to remember that housing prices will probably continue to rise. Again, don’t panic — experts see the soaring rise in prices of last year cooling off. But home prices aren’t likely to drop, making now a good time to buy.
And through all this uncertainty, customers can count on the consistency of the Simple Access® suite of Non-QM products from Luxury Mortgage Wholesale. Contact us today to learn how you can more easily navigate the ever-changing mortgage landscape.