Buying a Home? Good, Now You Can Afford More
When the US Treasury announced late Friday that it was taking over Fannie Mae & Freddie Mac, most of us figured that it would have a positive effect on mortgage rates. It sure has...and quickly!
Below is an example of Wells Fargo rate changes from last Friday to today.
Last Friday afternoon, Wells Fargo was offering qualified buyers with good credit the following:
30 year fixed rate (up to $417,000) = 6.250-6.375% , 0 points, 60 day lock
30 year fixed rate ($417,001- $729,750) = 6.375-6.500%, 0 points, 60 day lock.
Here's today's rates, for that same qualified buyer:
30 year fixed rate (up to $417,000) = 6.00-6.125%, 0 points, 60 day lock
30 year fixed rate ($417,001 - $729,750) = 6.125-6.250%, 0 points, 60 day lock
1/4 percent improvement, across-the-board!
Borrowers (who have not yet closed on their new homes), should request these lower rates because many companies allow them to make this change. One example, Wells Fargo, has a "return to float" policy, which effectively allows borrowers to "unlock" their loans, in order to get a lower interest rate. Please note that the rate reduction affects Fannie/Freddie loans; FHA & VA loans were already funded (indirectly) by the US government; those rate are essentially unchanged from last Friday.
Those buyers who have already registered loans with mortgage companies should see if their company is able to offer them better rates. Those buyers "sitting on the fence", may now be persuaded to write a contract, now that rates have headed lower.
How much lower? No one knows. A federal government take-over of private agencies (Fannie/Freddie) is new territory; rates could go down further, or stabilize @ the 6% mark. All I know is, it's good news for borrowers, and good news for all my buyers.
Sincerely,
Michael Pennisi
908.656.3858
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