Current mortgage rates are at an all-time low. This is leading to a significant amount of work for mortgage loan originators. But this refi boom won’t stick around forever. Once the economy gets rolling again and COVID-19 has slowed, the future of mortgage rates will be affected.
How will they be affected? That’s yet to be determined. There is still so much to be done. There is still so much up in the air regarding when life will carry on as usual. Some regions such as San Francisco have recently announced shelter-in-place orders extending into May while states like Texas and Georgia are re-opening—business as usual.
Current relief efforts for owners of FHA-backed mortgages has also caused industry experts to wonder where the future of mortgage rates will be after COVID-19, and when that will be.
As an automation network for MLOs across the country, we’re keeping up with the latest the industry has in store. And we’ve come across what we believe will be 3 key ways the industry will change.
Buyers and homeowners will be paying greater attention to rate changes
Anyone who didn’t realize they had a high interest rate certainly found out during the pandemic. It caused everyone to reevaluate and consider refinancing. This is especially true for first-time homebuyers who may have acted more on an emotion than anything.
As the economy continues to be volatile, homeowners and buyers may suspect they have a short window to act. And as an MLO looking to grow your business, this is the perfect time to prove your expertise. Close loans quickly for your clients and you’re guaranteed to get more work.
The future of mortgage rates may affect purchasing trends
The housing market will play a key role in future purchasing trends. For most, low home values encourage homebuying. But for savvy buyers and investors, the interest rate is the more important factor.
This is why the current drop in rates is causing a surge in refinance applications.
But what happens after? What happens when the interest rates start to slowly make their way up? Will it cause a spike in purchasing from those who fear the rates may continue to rise? Or will it cause a decrease due to those who think they’ve missed their opportunity?
The future of mortgage rates is in the hands of the current, volatile economy. Which way the market trends will determine mortgage application and refinance numbers.
Technology will be a key player in mortgage loan origination
If COVID-19 has taught us anything, it’s that remote work can be done with precision. Those who may have been slow to adapt to the technological advancements will now think differently.
After seeing the success that has come from the refinance boom being done virtually, it will be hard to dispute. Technology in the MLO industry is here to stay. The advantages are simply too hard to ignore.
At Wemlo, we’ve seen first-hand how technology has sped up the process of loan origination. The future of mortgage rates will affect MLOs, and the technology MLOs use will affect their bottom line.