Homebuyers Panic Over Payment Hikes!

Are you a home buyer panicking because you did everything right and now you are hearing that because you have good credit and a large down payment, you will be punished and have to pay more starting May 1, 2023 because of the new mortgage rule?

In the past couple of weeks, we have seen articles all over the internet about the new mortgage rule. The media is saying that buyers with higher credit will be punished to subsidize riskier borrowers. We know that sounds scary and can make any normal person who was considering selling their house say “Forget it! I’m not going to get a mortgage now!” Between rising interest rates and now being told you will be paying more, it can make you want to stay put and give up hope.

Well, we decided to look into it and talked to our lenders to find out what was truly happening and what was just hype. Let’s keep in mind first that the media has to make a big deal out of everything! They need something to talk about and this was a hot subject that was great for getting people to click!

The first thing we learned is that these changes do not affect every type of loan. There are different loan options when you are looking for a mortgage. A good lender will be able to walk you through all the options.

If you are thinking of moving you absolutely need to talk to a professional! You will need a good lender who can help you with your financial planning and will walk you through all of the options based on your specific financial situation. A local lender will work with you to find the sweet spot based on your finances.

Also, lenders knew this was coming and actually made changes 45 days ago to mitigate the impact of this new rule. Just like they did with the rate changes last year, they have preplanned for these changes and it is already built into mortgage rates. So, May 1 will not be a big disruptor.

The reality of the situation is that people with higher credit scores will still receive lower rates than those with lower scores. There just won’t be as big of a gap between the rates now. So please…don’t get into a panic and start trashing your credit! This new ruling may not even affect you at all depending on your finances.

If you would like a list of local lenders who have worked successfully with our clients please reach out to us at aprilandjean@ajrealtypartners.com.