There’s been a lot of changes in the mortgage market of late. Fannie Mae and Freddie Mac may go back to private ownership in 2020, mortgage rates are bouncing up and down, and banks are getting pickier about who gets a mortgage. It’s enough to make you wonder if it’s worth making the attempt to buy your dream home in Philadelphia. First, don’t panic. Lenders are still issuing mortgages and Fannie and Freddie are still under control of the federal government. You can still get your dream home, and a Philadelphia mortgage company can help you more than you realize.
Make Yourself Appealing to a Lender
Lenders are only so tolerant of problems with your credit history. They may overlook the occasional late payment, but they don’t like seeing outstanding debts that haven’t been settled or delinquencies that weren’t addressed. You’ll have a harder time of getting a mortgage if you don’t take care of these issues.
The time to fix your credit is now. Get your credit report from the credit reporting agencies and go over it with a fine-tooth comb. Take note of all the issues and find ways to fix them. Having clean credit before you talk to a Philadelphia mortgage company about getting a mortgage increases your chances of approval.
Don’t Pay Too Much Attention to Mortgage Interest Rates
It’s true that interest rates can fluctuate greatly from day to day, but you’re not without options to minimize the impact of mortgage rate changes. One option is to lock in the interest rate for 30 to 60 days. This may incur a fee, but the fee is less than what you wind up paying over the life of the mortgage. In the event you can’t lock in the interest rate, you can get the mortgage with the prevailing interest rate and refinance when rates go down. You usually have to wait a few months after the initial funding of the loan to refinance into a lower interest rate, but showing a lender you’re capable of making the loan payments can work in your favor.
Fannie Mae and Freddie Mac Aren’t Going Away
For the past 11 years, Fannie Mae and Freddie Mac have been a government-sponsored enterprise (GSE), but were bailed out by the federal government in 2008 and placed into conservatorship. Since then, they’ve been under control of the Federal Housing Finance Agency. It’s estimated that the GSEs have backed almost 50 percent of all mortgages originated in the US to date. The fact that the GSEs are responsible for keeping the housing market afloat is not lost on the federal government.
The GSEs will still continue to back loans the same as they always have. That means you will still have access to their mortgage products in the event you can’t get a traditional mortgage. It’s always good to plan for a home purchase well in advance of starting the search, but you don’t have to worry that the low down payment loans are disappearing.
Don’t Try to Time the Market
If you’re planning on buying a home for the long haul, you won’t be as susceptible to fluctuations in the market. The price you paid for your home isn’t as big of a concern because you’ll see appreciation on your purchase over the course of your ownership. Staying on the sidelines during a period of extreme price changes can be a good strategy, but if you want to buy a home, you need to pull the trigger at some point. Follow your instinct and don’t overthink the housing market.
It’s fine to follow the housing market news to find out what’s going on and what you can expect when looking for a home to buy. But you may find that the news doesn’t really apply to your personal situation when you go to buy. Do your research, find your home, and talk to a Philadelphia mortgage company about your ability to get the mortgage you need.