Brexit: Lower Rates with Little Delays

Brexit, the vote by British citizens to leave the European Union, could have far reaching implications for international trade, but it could take several years to realize the full impact. In the near term, it means lower mortgage rates, stronger refinances, and improved affordability for home buyers.

For the 2nd quarter Survey of Mortgage Originators, lenders were asked whether Brexit had impacted their business. 14.3 percent noted more rate lock extensions, while twice that figure noted a shortage of appraisers to handle added volume. A majority 64.3 percent noted no issues and no respondents indicated delays.


The need for rate lock extensions is not clear. Higher settlement volumes relative to appraisers could create delays and the need for rate lock extensions. Likewise, a late rate lock extension could trigger re-disclosure of a loan estimate (LE) under TRID and a longer timeline just as decline in the APR of 0.125 percent or more would trigger re-disclosure of the closing disclosure (CD). Regardless, these limiters should ease with time as refinance volumes burnout and as the purchase market moderates through the fall.

Ken Fears, Director, Regional Economics and Housing Finance

Ken Fears is the Manager of Regional Economics and Housing Finance Policy. He focuses on regional and local market trends found in the Local Market Reports and the Market Watch Reports . He also writes on developments in the mortgage industry and foreclosures.

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