We’ve talked in the past about the effect mortgage rate can have on your buying power. The good news is that rates have come down and are below 4.0% for the first time since June 2013, according to USA Today. Just that drop in rate alone, has improved your buying power almost 10%. Where you might have qualified for $180,000, you now might be able to buy at $200,000 for the same monthly payment, as illustrated in the graph below. With home prices remaining relatively flat as of late and the mortgage rate dropping, this could be the time for you to check with a lender and see how your buying picture looks now. There’s even more great news on mortgages this week below the graph about changes in regulations.
At the Mortgage Bankers Association Conference this week, Federal Housing Finance Agency Director Melvin Watt said his agency had reached an agreement in principle with Fannie and Freddie that would develop “sensible and responsible” guidelines for mortgage borrowers with as little as 3% to use as a down-payment.
And more good news for the lending indsutry came as the National Association of REALTORS® announced their success as they’ve been fighting the detrimental impacts of the Qualified Residential Mortgage (QRM) rule contained in Dodd-Frank.