Flyhomes looked at the rising interest rates in the country and the skepticism of sellers and determined that refinancing was the best option. Flyhomes’ new refinancing program, Buy Now, Refi Later, is designed to attract more buyers to the housing market.
RealTrends spoke with Dan Richards, Flyhomes’ head of mortgage, to discuss the program as well as his overall view of the housing market.
RealTrends: Could you give me a brief overview of the Buy Now Refi Later program. What are its goals?
Dan Richards: Our program’s purpose is to get homebuyers off their feet. They can accept the higher rate now and know that there will be rate relief in the future. We want to remind people that they are able to refinance in general. Refinances are done by adding third-party costs to the loan and financing them. Although it appears that the homeowner is not paying any fees, they will still have to pay them. Flyhomes doesn’t do this.
RT: Flyhomes has released an “Interest Rates Inertia” study on consumer behavior in the housing sector. Do you think that open access refinancing could alter any of the trends or statistics?
DR: Refinancing that rate is a great option for buyers who are just starting to look for a home. The general feeling among homebuyers is that the last year’s high rates were shocking. However, now things are stabilizing and they are moving.
The purchase cycle generally starts to increase around this time of year, but refinancing options are now affecting those numbers. Although it may not seem like a lot, the difference between 5.5% & 5.25% adds up to approximately $20 per month. This money can make a big difference for both the borrower as well as the lender over the life of the loan. The more customer-friendly we can be in this industry, then the better.
RT: Do your predictions for the housing market in 2023 look reasonable?
DR: I think we’ll see mortgage rates rise and fall throughout the year. No one knows if we will hover around the low 6% range or fall into the mid-5% range. No one knows if the homebuyer’s psyche is a first-time or a seasoned buyer.
A significant number of people are stopping their search due to interest rates. If you can afford to purchase and are able to qualify for a mortgage, and you don’t have to deal with the sticker shock of mortgage payments, then I recommend that people buy now. Because inventory is still at historic lows, home prices will rise once rates drop. To get potential buyers off the sidelines, the Buy Now, Refi Later Program was created.
This market is always changing. We can offer homebuyers peace of mind by letting them know that if mortgage rates drop again they can go back to Flyomes to refi the mortgage they received at today’s rates.