It seems the upcoming cut in the FHA annual mortgage insurance premium may not just help spur some new home buying activity but, may once again stimulate the refinance business (FHA Refis).
This is good for lenders (who offer FHA financing), consumers who will lower their monthly payments, and the economy, as it will provide some additional spendable cash those who refinance.
The FHA cut, coupled with Fannie’s and Freddie’s revival of their low down payment, 97% LTV loan, will also offer those with little money to put down, but with good credit and income, a pathway into the home buying market. Let’s hope with the economy recovering, now aided by these new FHA refinances, and a stabilizing housing market, there will be a sufficient affordable housing stock for these first time buyers who may best benefit from the new programs.
With the possibility of the FHA refinances, new opportunities for first time home buyers, the economy on the mend and home prices increasing, 2015 may be shaping up to be a pretty good year for mortgage lenders, as long as they are positioned to take advantage of the opportunities presented.
This may be the year we see the Millennials begin their foray into the housing markets. This will present some challenges for lenders. If they are back to chasing these FHA refinances, they may miss the long term benefits of servicing the new generation of home buyers and the move up buyers they create.
Something that will last long after the FHA refi boom is over. This is a new generation of shoppers. They will seek information about products and services online before making a financing decision. They will also carefully vet the lenders who they determine may offer what they need. They expect quality, honesty and service. And, they expect it fast.
Just because you have products that may assist these Millennials, you may find yourself missing the boat if they are not properly advertised and then delivered timely and with quality service. These new buyers want online access to information and applications with the capability to update info electronically while receiving immediate responses to their questions and needs.
Couple their demands with the new requirements, the expectations of the agencies and FHA for quality loans with zero defects and you have yourself a real challenge. A challenge you can meet with the proper preparation.
Be sure you have the training and systems in place to not only originate a quality loan, but to retain such quality throughout the loan process, beginning to end. You must have the capabilities to manufacture a quality product for the consumer and you.
Don’t forget about the new TILA-RESPA (TRID) rules coming up quickly in August (not that far off). These too will once again change the game. Be prepared to play differently.