If you didn’t know by now, mortgages in the United States are at an all time high in consumer demand and all time low in interest rates. If you already refinanced, you are probably relaxed knowing you may have the lowest rate you’ll ever get. If you haven’t refinanced, it is smart to pay attention to recent trends, including the fact that rates are indeed rising and will continue to rise.
Let’s examine some of the trends that are shaping and reshaping the mortgage industry in 2022.
One trend is that more and more non-banking lenders are growing their share of the market, including companies like ours. Many of these non-banking lenders are streamlining the loan process, saving borrowers time and effort. These companies put a lot of research dollars into heavily digitizing the process to submit an application, upload documents, and communicate with the lender more easily. Many independent brokers like us shop for borrowers at non-banking lenders and do the uploading and communicating for you, making the process even easier.
Another trend we are seeing is more non–qualified mortgage lenders reentering the market. Lenders stopped accepting non-QM applications as credit guidelines tightened and capital availability diminished during the height of the pandemic. Due to economic recovery in recent months, more lenders are being prompted to underwrite non-QM loans again. So, if you don't meet specific criteria needed for a qualified mortgage, you likely have other options to help you obtain a mortgage.
The third trend that we are expecting to see in 2022 is more cash-out refinances. With a cash-out refinance, borrowers can do things like purchase a second home or investment property, make repairs or remodels to their current home, or consolidate debt. Generally, as rates increase, the refinance market naturally shifts toward a higher volume of cash-out refinances so we are sure to see this shift in 2022.
A refinance has the potential to help you save money for years to come so it is important to stay on top of these trends and take action based on them.