What Will Mortgage Rates Do In 2013?

No one knows for certain what rates will do day to day. We can, however, make educated predictions based on the history of rates. We all know rates have been low; historically low, even! Not all good things last forever though. Don’t panic! While we expect these historically low rates to come up some; we do not expect to see the 7%+ rates to return any time soon.

Whether you are a homeowner seeking to refinance, a home buyer or a renter, we should plan for slightly higher housing costs this winter.

Certain mortgage fees are rising, especially for those with small down payments. Luckily for borrowers, low mortgage rates are still around, but they only have one way to go this year, and that’s up.

This isn’t the time to wait for a better deal. It’s time to act.

It’s also time to pay close attention to a number of new mortgage regulations that are being released this year. They will help determine who gets a mortgage in the near future.

Click here to see if you qualify for a mortgage while the rates are still low. 



Expect to see the following housing trends this year:

  • Home buyers with low down payments will pay higher mortgage insurance premiums when they get a Federal Housing Administration mortgage. Read more about the increase in MIP, or mortgage insurance premiums, by clicking here. The FHA says it will increase the annual insurance premium that is added to a borrower’s monthly mortgage payments by 0.1 percent. It may sound like a small increase, but this hike is on top of numerous insurance premium raises the FHA has implemented since 2008 as part of its ongoing efforts to shore up the FHA’s reserves. Industry observers say there’s great potential for much higher increases this year. FHA borrowers are charged about 1.25 percent of the total balance of their loans per year. Before the financial crisis of 2008, the charge was about 0.5 percent. Because mortgage rates are extremely low, the added cost might not affect borrowers significantly now. That could change once rates rise, says Janneke Ratcliffe, executive director for the Center for Community Capital at the University of North Carolina at Chapel Hill. Refinancers and homebuyers who have not taken advantage of the historically low rates shouldn’t waste time, mortgage professionals say.
  • In many parts of the country, rent will continue to climb as the number of available rental apartments shrinks and demand rises. U.S. apartment vacancies dropped to an 11-year low of 4.5 percent last year’s fourth quarter, according to real estate research firm Reis. Foreclosures, still-tight mortgage lending requirements and a weak jobs market are contributing to the surge in demand and rental prices.
  • Now that the election is over and the “fiscal cliff” ordeal has at least partially been put to bed, President Barack Obama‘s administration will likely renew its push to help underwater homeowners. That could create refinancing opportunities for homeowners who have not been helped by earlier refinancing programs. “I do think the administration will return to some of the issues they have previously worked on, in particular refinancing, which I would expect to be highest on their agenda,” says Julia Gordon, the Center for American Progress‘ director of housing finance and policy.

There is no time like the present to see if refinancing makes sense for you. We are happy to see if you qualify by clicking here to submit a secure application.

  • A series of new mortgage and servicing rules is being unveiled early this year. These rules will reshape the mortgage industry and could affect consumers, for better or worse, once they go into effect. The main rule released so far requires lenders to verify that a borrower has the ability to repay the loan when getting a mortgage. The rule was designed to protect borrowers from the types of risky loans that led to the housing crash.

If you have any questions relating to mortgages, whether it be a new mortgage or refinancing a current mortgage, click here to submit your question.  We look forward to hearing from you!




DISCLAIMER: Neither Indiana USDA Mortgages (IndianaUSDAmortgages.com) nor Luminate Home Loans is affiliated with any government agencies, including the USDA.


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