As Rates Rise, Mortgage Originations Need To Vary Portfolio


King Cash

What the topic of cash-out refinancing raises. The housing market was a solid winner for most of 2020 and half of 2021. A cash-out refinance swaps a borrower’s existing mortgage for a new loan for more than the current mortgage (assuming the borrower has built up equity in the home). with the difference going to the borrower in cash, usually for home renovations, credit card payments, or other financial needs. Borrowers can typically “pay off” up to 80 percent of their home equity. Loan officers should be familiar with their company’s programs. Yes the rate will be higher for someone you funded last year, but if they need the money and the rate is lower than their credit card price …

Affordable living effects

Financing the existing housing stock is only part of the equation lenders are set up for. New housing is important to the new Biden administration, and creators should know what is happening in Washington DC. Housing is included in the overall infrastructure bill as it should take into account the role of housing in stable communities. First-time home buyers are reliable neighbors and consumers. Small businesses are being supported by more customers, and stable housing means economic stimulus and economic development for all businesses.

While this may not be directly relevant to your current customers, it is important for mortgage lenders (MLOs) to be clear about what is being suggested to support affordable housing. The overview of the plan calls for the funding to “create, maintain and convert more than 2 million affordable and sustainable living spaces”.

Any plan that involves building or maintaining more than 1 million housing units should be relevant to MLOs. A million units that are theoretically affordable, robust, accessible, electrified and energy efficient. The plan would also improve the infrastructure of the currently 1.2 million social housing units. The plan provides tax credits, competitive grants, and other forms of assistance to foster partnerships between local governments, nonprofits, and private developers, and it will pool government money with resources in the private sector.

In the zone

The plan seeks to remove some of these non-financial obstacles by also focusing on the removal of exclusive zoning laws, structural policies on minimum land sizes, parking space requirements, and the preference for single-family homes, which often prevent affordable developments from being legally and economically feasible. And create a new grant program that will allocate resources to the communities that remove these barriers. Although details still need to be clarified, living as an infrastructure is an economic engine.