We tend to end each year with the mantra, “New year, new me!” Well, this war cry isn’t just for you. Businesses take the beginning of the year as a clean slate as well. A new calendar year is an ideal time to take a look at burgeoning businesses and the latest financial trends. As the ball drops, it’s a moment to reflect on the market that was, and where you expect to see it going in the next 365 days. This is true of the escrow industry as well. Here are some changes you can expect in escrow during the 2019 calendar year.
Mortgage Rates to Rise
Escrow is dependent on two major factors–how much your house is worth and how much you are expected to pay. Mortgage rates have been on a steady rise over the past couple of years. However, the dollar amounts still pale in comparison to the financial collapse of 2008. This coming year will see more potential homebuyers opting to rent instead. With that, you can expect an increase in rent prices. However, financial specialists don’t expect these prices to outshine income growth.
Apartment Construction Grows
With people buying houses on the decline, the apartment market is soaring. It’s expected to continue flying high well into 2019. This means 2019 is an ideal time for investors to buy up properties or break ground on construction projects. There’s a lot of money up for grabs in the coming year.
S. 2155 Is Coming
Small lending companies that do less than 500 loans per year will see a bump in profits this in 2019. For one, businesses with less than $10 billion in loans can approve creditworthy people for a qualified mortgage loan. That means those who high debt ratios can still qualified. In addition, business loans are kept separate from dwellings. Therefore, if a person buys a multi-family home and doesn’t live in it, it still wouldn’t be classified as a business loan. This will save the person getting the loan money.
No Need to Wait for Lower Interest Rates
Sec. 109 of S. 2155 implements another big change to escrow. Potential homebuyers no longer are required to wait three days after a creditor returns with a second credit offer at a lower APR. Banks are currently ready to start this new provision. However, they are still waiting for guidance on how it will be implemented.