Silver lining to mortgage interest rate increase

When mortgage rates were at their lowest (when they were down in the 3s), it seemed like everyone wanted to buy.  The problem was that not everyone could qualify for a loan.  After the most recent real estate crash, lenders reacted by tightening their lending requirements.  We all know they needed to be tightened, but many lenders tightened way too much as part of a knee-jerk reaction to the real estate collapse.  In recent, it’s been harder than ever to qualify for a mortgage.

Well, with the recent spike in interest rates refinances have plummeted.  In fact, large banks like Chase and Wells Fargo are reporting that their earnings from refinances have dropped significantly in recent months.  Some experts say that to make up for this lost revenue, many banks may start extending credit to a larger pool of buyers, allowing them to originate more mortgages.

So, if you are someone who’s been on the borderline of being able to qualify for a mortgage, keep your eye out.  Mortgage lending requirements change often and if they loosen just a tad, that might allow you to get into the mix!

The background information for this was obtained from Inman News.  See their article by clicking here.