Don't Wait to Lock Your Mortgage Rate!

By
Mortgage and Lending with Blueleaf Lending NMLS #130813

Don't Wait to Lock Your Mortgage Rate!  You may have heard about the new Guaranty Fee that was passed by Congress at the end of December, 2011.  The Guaranty Fee for all GSE's, or Government Sponsored Enterprises was increased by 10bps in order to pay for a temporary 2 month extension to the payroll tax cut, extending it until 2/29/2012.  The payroll tax stimulus plan was originally enacted approximately 13 months ago to lower tax rates (FICA) for salaried and self-employed tax payers by approximately 2%. 

New Loan Fees Coming Soon

According to the new law:

  • Fannie Mae and Freddie Mac must collect an average fee of no less than 10 basis points per new loan
  • FHA must raise its monthly mortgage insurance premiums 10 basis points for all new loans. 

What does this mean to you or your clients?  Higher mortgage rates are inevitable due to the added cost to ALL lenders who sell loans to Fannie Mae, Freddie Mac, and Ginne Mae.  The new Guaranty Fee applies to ALL loans sold and delivered to the GSE's, Fannie and Freddie, at the beginning of the 2nd quarter or later.  Some lenders are pricing in the adjustment gradually over the next couple months, while others are pricing their rates with one giant increase. 

Regardless, if NOTHING CHANGED in the market, borrowers can expect to pay .125% to .25% more on the interest rate. 

The expected cost to consumers is no less than $10 per month per $100,000 borrowed.  Some experts expect Fannie Mae and Freddie Mac to collect MORE THAN is minimally required.  This could add an additional $30-50 to your monthly mortgage payment per $100,000 borrowed!

Get your Rate Locked Today!

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Anonymous
Anonymous

That is some kettle of fish.  There is always something new to add to consumer costs.

Jan 10, 2012 08:08 AM #1
Rainmaker
391,817
Kim Sellers
Lake Arrowhead, CA Coldwell Banker - Lake Arrowhead, CA
Lake Arrowhead Realtor - BRE#01412099 - Lake Arrow

Thanks for posting this information.  If anything maybe some will get off the fence.

Jan 10, 2012 08:20 AM #2
Rainmaker
58,731
Chris Jones
Blueleaf Lending - Chicago, IL
Sr. Mortgage Planner

No kidding about consumer costs...I've seen them go up dramatically, title, appraisal, lender, etc since all the regulations started...More regulation = higher costs in my opinion (but maybe safer lender practices)

 

Kim: My pleasure!  Hopefully, some of the fence sitters will realize that this is a good time to buy!

Jan 10, 2012 01:09 PM #3
Rainmaker
2,535,777
Rebecca Gaujot, Realtor®
Vision Quest Realty - Lewisburg, WV
Lewisburg WV, the go to agent for all real estate

Chris, hopefully consumers will not wait but will go for it now...

Jan 12, 2012 03:23 PM #4
Rainer
147,767
Michael S. Bolton
Michael S. Bolton,Inc. - Zimmerman, MN
MN Appraiser

Chris~While this may hopefully get some of the people on the fences to move forward, but increasing the cost for home borrowing in this market doesn't make any sense to me. It defies logic. Have an awesome day!

Jan 19, 2012 07:23 AM #5
Rainmaker
58,731
Chris Jones
Blueleaf Lending - Chicago, IL
Sr. Mortgage Planner

Rebecca:  thanks for the note.  We are seeing some sign of life locally.  Particularly first time home buyers.  I HOPE it's a good sign for the spring market!

Michael:  I couldn't agree more.  Increasing borrower costs to pay for the payroll extensions doesn't make sense to me either.  It's even harder to explain to borrowers that rates will be going up to fund what I view is an unrelated government expense.  With the government control of Fannie and Freddie, congress has been able to dictate directly to the agencies with little resistance.

Jan 20, 2012 05:55 PM #6
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Rainmaker
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Chris Jones

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