A new administration is about to take office, one whose policies are largely yet to be known. Many are wondering what will happen to the real estate community, the mortgage industry, and in particular interest rates.  In an attempt to provide our clients with an answer, we begin by acknowledging that yes, rates appear to be on a clear and consistent upward path towards normalization.  But immediately following up with a calming, albeit technical, explanation: We believe that the ultimate effect from the new administration on the mortgage industry could be quite a positive one. Assuming that there will in fact be a significant tax cut to the middle class and increased infrastructure spending, we should see an increase in consumer confidence and wage earning incomes all across America.  These two factors alongside a much faster and more robust GDP will jump start an American economy that has been burdened by a super-regulatory agenda.  Though regulations are indeed very important, Wall Street will react favorably to less regulations.  It is widely accepted that higher interest rates will be coming over the next 18 months.

We recommend that you update your preapprovals.  To do so we will need updated pay stubs, bank statements and possibly re-pull your credit reports.   We can also provide new Loan Scenario pricing sheets to see what your payment would be today, given a new interest rate environment.  Don’t be alarmed if you have to lower your purchase price a bit, you will not be alone.  The market will adjust itself accordingly.  And on a final note, we remind our clients  next time they get a retirement statement in the mail, to take a peek inside. You may be happily surprised to see how higher interest rates affect those accounts.

~ Monica & Stew

Contact us for more information:

Monica di Perna

Direct: (415) 710-0354

Email: mdiperna@rpm-mtg.com

Web: www.rpm-mtg.com/mdiperna

NMLS #: 116494

 

Stew Sweet

Direct: (925) 395-3693

Email: ssweet@rpm-mtg.com

Web: www.rpm-mtg.com/ssweet

NMLS #: 1037225

 

RPM Mortgage, Inc- NMLS 9472-Licensed by the Department of Business Oversight under the Residential Mortgage Lending Act. Equal Housing Opportunity.