“Home ownership remains the American dream, but obtaining that dream requires proper financial planning and management,” advises Vahe Hayrapetian. Vahe Hayrapetian is a sales professional with an impressive career focused on financial services and home loan providers. He is a professional with several years of experience and understands the mortgage market.
In recent years, Hayrapetian has witnessed national concerns with home ownership. The primary issues remain lack of financing and rampant foreclosures. These trends have discouraged many first-time homeowners from pursuing mortgages. In 2013, there was an industry turnaround, with consumers keeping up with their loans, and avoiding foreclosure. Banks have been more aggressive about approving short sales, where properties are sold before the bank completes the foreclosure.
The Wall Street Journal reported in a recent article that the number of U.S mortgages that were behind on their payments or in foreclosure dropped to their lowest level in nearly four years. That was down almost 20 per cent from one year ago.
Vahe Hayrapetian Notes What is Ahead for Mortgages in 2014
Hayrapetian agrees with analysts predicting a slowdown in the housing market in 2014, with mortgage interest rates trending higher. This will slow down new applications. The Federal Reserve will implement regulatory changes, pushing down on economic recovery. The three key areas of focus will be; consumers will be more protected, loans will be harder to obtain, and mortgage fees will increase. Vahe Hayrapetian shares his top 8 trends for mortgages in 2014:
1. Fed’s QE (quantitative easing) Program to End - The QE is a Federal Reserve program that supports low rate mortgages. They purchase mortgage and treasury bonds in the mortgage market, which creates an artificial demand which helps to boost prices, in turn, helps to lower rates. For homebuyers the QE has been a boon. The program ushered in the lowest mortgage rates in history. Home affordability soared and purchasing power reached record levels. Vaye Hayrapetian advises that the QE program is set to end. The Federal Reserve will reduce its mortgage and Treasury bond purchases and continue to taper its purchases through 2014 and 2015.
2. Home Values to Rise - Federal Reserve members expect home values to rise in 2014. This will reduce the number of underwater borrowers. When home values increase, it is easier for homeowners to sell.
3. USDA (United States Department of Agriculture) Refinance Program To Continue? - The USDA Streamline Refinance program was launched in 2012 as a two year pilot program. When the program was introduced it was limited to 19 states which were identified as the “hardest hit” by the economic downturn. It was then extended to include 35 states. Over half a million homeowners in rural and suburban areas are eligible. If you live in one of the 35 pre-approved states, the mortgage rates and qualifying hurdles are low. The program is set to expire in February 2014, but the USDA will meet to determine whether to extend, modify, make permanent, or terminate the program.
4. New “Qualified Mortgage” Rules - The Consumer Financial Protection Bureau’s goal with the new mortgage rules is better protection for borrowers. The regulations are designed to ensure a borrower’s “ability to repay” a mortgage. A borrower’s overall debt can make up no more than 43 per cent of gross income. The rules bar some loan products; interest only loans, balloon-payment loans, and mortgages with terms that extend past 30 years.
5. The FHA (Federal Housing Administration) Rule Changes for Reverse Mortgages - The new rule changes will result in fewer homeowners who will qualify for a reverse mortgage. In the past credit reporting was not required as the assumption was that a property owner could handle a new lending agreement. Lenders are now required to provide the FHA with credit information that proves the mortgage holder can satisfy local tax authorities and be able to maintain home insurance.
6. Mobile Technology - The use of technology for mortgage shopping will continue to increase, especially with younger borrowers, notes Vahe Hayrapetain. Lenders will be using their mobile devices, tapping vendors to help borrowers to shop for rates, mortgages and lenders.
7. Stronger Online Players - Online mortgage brokers will sacrifice commissions for volume and selling cut-rate mortgages, benefiting the consumer with greater mortgage discounts.
8. Consumer Education Will Increase - Consumers will become increasingly savvy. They will spend more time researching rate comparisons websites, online mortgage forums, blogs, calculators, and online mortgage tools. Those seeking a mortgage will educate themselves about fine print like penalty calculations, rate blend policies and refinance restrictions.
Prospective borrowers need to become educated when pursuing home loans, and lenders should provide comprehensive services to ensure a high level of fiscal literacy. You can follow Vahe Hayrapetian on Twitter.