After record-low mortgage rates and an “un-COVID phased” real estate market throughout 2020, the first few months of 2021 are shaping up to be much the same, with no slow down in sight for Realtors and Mortgage Lenders. The normal “spring buying season” that many prepare for is just the 15th month of an above-average activity, multiple offer, low-rate market. While rates are still incredibly low in relation to decades past, economic factors and the spread of the COVID vaccine, along with heightened consumer confidence are all teaming up to create fodder about mortgage rates “on the rise” in the near future. Selma Hepp, Deputy Chief Economist at CoreLogic says, “We are still of the opinion that [mortgage rates] are going to remain in the low 3s,” she says. “Our average for the next year and a half is about 3.2%.” Future rates are highly dependent on what happens with inflation, and Treasury rates, which have been rising. “That’s what’s going to play on the minds of lenders, in the short term” Hepp says.
The larger problem at hand, and the problem affecting most major Texas markets is inventory! While low rates persist, thousands of homeowners across Texas are cashing in by refinancing and using the additional savings to either “move up” to a larger square footage home, or “spread out,” purchasing land and building their dream home from the ground up. Yet with little to no inventory available in many of the most desired areas, and home going for nearly double the value (should you even be able to get your office accepted in the often multiple-offer scenario), many Texas homeowners are at a major crossroads on what to do. The influx of new companies moving their headquarters to Texas, East and West coast residents relocating and low lot availability for homebuilders has created “the perfect storm” of inability for many Texans to cash in on the savings their refinance has yielded. As rates rise, however, the “refi boom” could be coming to an end in the months to come. Rates were low enough to offset the upfront cost of refinancing for many homeowners. But as rates have climbed up, the demand for mortgage refinancing has slowed slightly.
As a trusted Lender with nearly 20 years of experience in many of the communities we serve, Legacy Mutual Mortgage would like to offer some advice to homebuyers (and/or Realtors) who find themselves looking to make some type of move with their current mortgage and housing situation. First, and very foremost, if you are looking to BUY – get pre-qualified. A pre-qualification letter from an accredited Lender will put you ahead of all others searching for homes without “doing their homework” first. Other quick tips to winning in a multiple-offer market include: 1) Know your market (your Realtor will help with this as well) 2) Put in your highest possible and best offer FIRST (don’t lose a deal because of $2000) 3) Work with the Seller’s time frame 4) Don’t ask for too many extras 5) Ask your Realtor about an “escalation clause” and be ready to use it if need-be
6) Make it personal! Yes… tapping the heart strings of your Seller DOES help when they are deciding what offer to accept. A home is an emotional sale – going above the rest of the “crop” of buyers to make sure the Seller’s know just how much you want their home goes a long way in today’s market 7) CONSULT YOUR LENDER! If you have built a relationship with your Lender, questions about your Mortgage are a given, but most all Mortgage Lenders (including each and every Legacy professional) have years of experience working with Realtors and helping them with all of the “minutia” of the offer. Make a call to consult with them if you’re stuck in a situation that they might be able to lend some insight. Perhaps there is a way to make your offer look more “shiny” by putting down more up front? Your Lender can help navigating the waters of multiple-offer turmoil by knowing your financial portfolio and suggesting things you might not have considered!
Last, but not least, here’s a quick UPDATE from our world here at Legacy Mutual Mortgage. We recently opened a brand new location in the booming city of New Braunfels. The new office, located behind the HEB at Loop 337 and 46 off Oak Run Parkway is the home of The Jenn Bailey Team and marked as our “South” New Braunfels location on our website map. We continue to hire additional processors, underwriters, closers and production staff to ensure that no matter how busy the world of Lending CONTINUES to be, the first-class customer service experience and clear, consistent communication we are known for does NOT get compromised. As we continue to grow, our Core Values, Mission and Vision stay the same! 2020 was an All-Time Record Breaking year for Legacy Mutual Mortgage and the first two months of 2021 have been as well. We absolutely could not achieve this level of success without the incredibly loyal, top-notch Realtor partners we work with in all of the markets we serve, so THANK YOU! Here’s to another year of helping thousands complete the American Dream! If you would like more information about Legacy Mutual Mortgage or any of our Loan Professionals, please visit our website (www.legacymutual.com) and make sure to connect with us on our social media channels (Facebook, Instagram, LinkedIn and YouTube) to find out more about what we stand for and who we are!