Fannie Mae Increasing Rates Dramatically

Fannie Mae and Freddie Mac will be increasing their rate adjustments effective immediately.   The following factors will determine interest rates:
  1. If a borrower has a LTV above 60% there will be a pricing hit.
  2. If a borrower has a FICO score below 720 there will be a pricing hit.
  3. If a borrower is cashing out there will be a pricing hit.


As a result of these changes, interest rates will increase anywhere from .125 to 2 percent.

Loans that are not affected are My Community Mortgage (MCM), FHA, and 15 year fixed.

Example:

Today's 30 year fixed rate is aprroximately 6.375% with 0 points for a borrower with a 675 FICO score and looking to do 80% cash out.

As of April 1st for the same scenario, the rate will increase to approximately 6.75% with the borrower paying 2 points.

Although this is an industry-wide rate increase effective immediately, my team at www.StressLessHomeLoan.com has been able to secure a "Window of Opportunity" to extend the better pricing with some of our investors until March 31st.

Therefore, if you have borrowers who are looking to buy or refinance, get the loan application in, approved, and locked no later than Monday, March 31st!

 Happy Investing,

Kendall Matthews, CRMC

 

5 Comments on Fannie Mae Increasing Rates Dramatically

Thank goodness they are doing something finally to help!!!

03/26/2008 10:59 PM by Jeremy Blanton- Myrtle Beach Real Estate ,Coldwell Banker Chicora (Coldwell Banker Chicora Real Estate)

Jeremy,

I do not get it. What help you are talking about? Or this is about 25 points, when you do not have time to read and think or both?

03/26/2008 11:06 PM by Jon Zolsky (FunCoast Realty LLC)

Jon- They are helping by bringing up the rates.... As the rates go up a small amount, it will hopefully stimulate the buyers that have been sitting on the fence, waiting for rock bottom to come to finally make a decision on properties.  As they make their decisions and start buying, it will hopefully help turn the market some from our current slump.  No, it wasn't about just 25 points.

03/27/2008 07:54 AM by Jeremy Blanton- Myrtle Beach Real Estate ,Coldwell Banker Chicora (Coldwell Banker Chicora Real Estate)

I guess I fail to understand why paying more for the same mortgage can stimulate anything. I f I could get a loan at a lower rate, I was more inclined to get the property, The terms were more beneficial. It makes borrowing money more difficult, so I can't see how this can bring us out of the current slump.

If fewer people can afford the mortgage. does it help?

03/27/2008 02:16 PM by Jon Zolsky (FunCoast Realty LLC)

You are missing my point.  The people that have been waiting on rock bottom will come back and buy if they see things beginning to cost more instead of waiting longer... as more begin to buy, it will bring prices up, and rates down some hopefully.

03/27/2008 11:04 PM by Jeremy Blanton- Myrtle Beach Real Estate ,Coldwell Banker Chicora (Coldwell Banker Chicora Real Estate)

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Real Estate Agent: Kendall E. Matthews (The Home Essential Group)
Kendall E. Matthews
Mesa, AZ
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