If you are interested in purchasing a home in the new year, it’s important that you find a home loan that works for you. These loans are always subject to rules, rates, and regulations.
The more you know about mortgage rates, mortgage regulations, home loans, and trends and how they will change in 2021, the better equipped you will be to navigate the home purchase process.
Here are a few key considerations.
There Will Be New FHA Single Family Loan Limits
While there is a lot of flexibility in the housing market, there are always hard limits and rates put in place by the government for certain types of loans.
Each year, the Federal Housing Administration (FHA) puts out loans that are backed by insurance. These loans are distributed by approved lenders and are subject to limits set by the government.
These limits will stand at approximately $822,000 in 2021. It is important that you know what limits are in place when you are trying to apply for one of these loans from an FHA lender.
Rates Might Increase in 2021
Aside from government-approved loans, you should also know about market trends. These loans are subject to changes in the economy, which had a rough going in 2020 due to the pandemic.
As a result, you could expect to see mortgage interest rates increase in 2021. The extent of the increase remains to be seen, but expect to pay a bit more for a loan in most cases.
Home Prices Are Likely Going to Rise
You need to know what to expect when you reach out to the bank for a loan. This starts with knowing how much you can afford to pay for a home.
Real estate investors are also trying to recoup from an economic downturn, so it is likely that home prices will increase in 2021. You will need to factor this in when you are trying to put together the best loan option for you or negotiating with home sellers.
Always try to get pre-approved whenever possible so that you can lock in mortgage rates and know what bargaining chips you are working with as you test the market.
VA Loans Remain A Popular Option Among Home Buyers
In 2020, Veterans Affairs (VA) benefits were a much-utilized option among home buyers. The ability to buy a house with little to no down payment will be just as hard to pass up in 2021.
Expect to see some attractive home purchasing options if you are eligible for these lending options.
Considering Mortgage Regulations & Trends for 2021
If you’re in the market to purchase a new home or refinance, consider the above points about mortgage regulations and trends and what you should expect in 2021. In addition, to make sound decisions, it is good to learn about Federal Reserve and the central banks influence on their decisions, economic conditions, origination costs, and how your financial and credit picture affect mortgage rates.
If you’d like to know more about any of the above points or if you’re interested in purchases a home or refinancing in Charlotte, NC, the states of North Carolina or South Carolina, you may contact us or call (704) 412-9131. We are always here to help and go the extra mile for our clients.