Predictions are always difficult to make. After all, no one can see what will happen in the future. Just like predicting the weather, mortgage trends have their ups and downs, and no one can ever be a hundred per cent sure of what’s going to happen next. However, that doesn’t mean that we can’t make our assumptions about what’s expected to come.
That said, here are three mortgage trends we believe will continue in 2020:
1. Interest Rates will Continue to Drop
While some have predicted that the interest rates would be increased in 2019, that never happened. Over the year, interest rates actually have been seen to drop consistently. This, of course, was good news to many borrowers because they enjoyed lower mortgage interest rates. Of course, those with older mortgages rates are also given the ability to refinance for the lower rates.
For this reason, we believe that 2020 will also experience the same drop in interest rates. So long as the Federal Reserve continues to drop interest rates, so will the rates of loans, mortgages, and others. This means that borrowing will be commonplace as people will make the most out of it.
2. Cash-Out Refinancing will Remain Popular
With such low-interest rates to borrow money, many homeowners will decide on whether or not they should take some money out of their mortgage. Of course, some will, and that’s only because the interest rates are low.
How the homeowners use that money from their mortgage will be entirely up to them.
They can use it to pay off other debts, carry out home-improvement projects, even buy their dream car. Of course, because they took money out of their mortgage, they may end up having to deal with higher interest rates, thanks to the greater amount being owed to the lender.
However, know that taking out some money from the mortgage is a straightforward way to get extra cash without applying for another loan.
3. Some Will Play It Safe
2008’s financial crisis still haunts many people to this day. The disaster occurred because of borrowed money. With such low-interest rates now, this can quickly happen again, where plenty of unqualified borrowers are borrowing in vast amounts without fear. Of course, while many have borrowed to the point of not having enough possession to pay it all off, they’re still safe from their consequences.
When the time does come, however, many will be left stranded staring at their empty bank accounts, wondering why no one reminded them of the crisis that happened many years ago. Keep in mind that these are all assumptions of what may happen this 2020.
We can never really know what the future holds, whether the interest rates will shoot up, plummet even further, or remain consistent. Whatever the case that might be, it is up to you how you want to make the most of the changing trends into your hands.
For some, you might go ahead and borrow as much as possible, making the most out of this golden time. For others, playing it safe will remain to be their game plan. They make smart decisions to ensure that when troubling times suddenly appear, they have what it takes to keep their finances stable and safe.
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