Don't be discouraged by the recent hike in interest rates - this cloud has a silver lining!
Between the rising interest rates and rumors of a scaled-back stimulus plan from the Fed, refinance applications are at their lowest level in almost two years. This is reducing the profits for banks; JPMorgan and Wells Fargo have both reported a downward trend in their refinancing earnings.How can the banks' loss benefit you? Experts predict that the lack of refi applications will open up the field to applicants with lower credit scores. The rising Mortgage Credit Availability Index (MCAI), up to 108.9 in June, is one potential indicator that banks are already widening their applicant pool.Another way that rising interest rates can actually help potential buyers is by turning an investor-driven market into an owner-occupied market. Yes, the costs for first-time homebuyers will be higher than before, but there will also be more opportunity. The new legislation to reform the big mortgage lenders will also maintain the availability of 30-year, fixed-rate mortgages.So before you despair at the increased costs of purchasing, remember that there are still affordable financing options to help you find your dream home!.