We all know rates are rising. Many people have declared that rising rates are killing the refinance market. Those people are right, but it’s a bit of a self fulfilling prophecy. The people who had upside down loans and qualified for HARP or the folks who were blessed enough to still have equity in their property and “normal” finances likely have seen a reduction or elimination in refinance opportunity. So they have stopped looking because they had a 5% loan, and were hoping for a 4% loan.
However,the fact is rates have risen for a reason and there is an opportunity for many who tried to refinance and have been unable to. That reason is that the economy is improving. The improving economy is helping people that could not get a mortgage over the last couple of years get financing in two very distinct ways.
1. The improving economy is helping their property value. If you were upside down and not eligible to get refinanced due to that, your value has SHOT up over the last 12 months. You may still be upside down. You may still not have recovered all of the home equity you lost since the top of the real estate market. But you likely have seen enough improvement to revisit your mortgage options.
2. The improving economy is helping their employment situation. People whose income was displaced are finding jobs in the new economy. Getting that income qualified for a new mortgage is very black and white in today’s mortgage world.
Most loans that could not get approved over the last 2 years had one of these two problems. The rising tide of the improving economy is lifting all boats. Double check with your mortgage professional (that would be me) to see if you can capitalize before rates really go up.
