Fannie Mae is Raising Fee’s on buyers loans that are Conventional loans effective 4/1/2011. That is only 72 days away. Once you make an offer on a house, it usually takes 45 days to close, so that would leave current buyers that are looking to use a Conventional loan 27 days from now to get under contract on a new home.
Obviously, this is a very hot topic this week in the mortgage industry.
Fannie Mae is Raising Fee’s almost across the board for all CONVENTIONAL loans effective 04/01/2011. This will result in either HIGHER FEE’s or a HIGHER INTEREST RATES for the borrowers. The only loans that will escape Fannie™s new fee structure will be loans with an LTV AT OR BELOW 75% with a FICO score above 740. The most significant increase is for borrowers using subordinate financing to avoid MI (such as an 80/10/10).
Let me give you a few examples of the new pricing and how it will impact borrowers:
1. 800 FICO score borrower, $400,000 purchase price, 20% Down Payment. Previous cost = $0, New Cost = 0.25% or $800 (EFFECTIVE 4/1/2011)
2. 715 FICO score borrower, $300,000 purchase price, 10% Down Payment so they want an 80/10/10, Previous Cost = 0.25% or $600, New Cost =1.00% or $2,400 (EFFECTIVE 4/1/2011)
I am certainly not a big fan of these new changes and certainly do not believe they will help stimulate our economy or the recovery. Additional fee’s tend to do just the opposite. However, it looks like we don™t have a choice so essentially we will roll with the changes. It™s more important than ever to make sure buyers are working with a knowledgeable loan officer and Realtor such as myself. The lender that I use with all of my Texas buyers is Travis Howard located in Southlake, Texas. He is with Service First Mortgage and his service is top notch! If you need a loan in Texas, Travis is the guy that will get it done! The loan officer will be able to review and compare all possible loan options and tax benefits to determine the best loan scenario for buyers.
Again, this is effective 4/01/2011. So Fannie Mae is Raising Fee’s¦. Here how you can use this to your advantage right now.
Do you have buyers (or are you a buyer) who is on the fence, but more than likely will buy in the next 3 months? If so, they should strongly consider buying now if they don™t want to pay a higher rate or higher fees.
For those borrowers buying after 4/01/2011¦.. Honestly, it will already be in effect and everybody will be pricing their loans based on the new pricing so the buyers at that time really won™t know any difference. The new increases will just have to be passed directly onto the clients.
Please remember that this is only for conventional loans. This does not affect FHA or VA loans at this time.
Links to the Fannie Mae announcement and new pricing matrix are as follow:
Kevin Rhodes ~ 832-233-0265 ~ firstname.lastname@example.org ~ www.RealtorRhodes.com ~ www.SalesInYourNeighborhood.com