Mortgage loan changes could mean higher rates in the future
Mar 2011 16

Proposed changes in the mortgage loan industry could lead to higher interest rates and increased difficulty for anyone looking to borrow money to buy a home.

The changes could come later this year or next (but if they don’t, probably after the 2012 elections) according to experts. So, those in the business are recommending that buyers make plans now to purchase homes before they are enacted.

Kenneth Harney does a great job of outlining the changes. I highly recommend reading his article.

Basically, there are four major changes:

  • Higher insurance fees on FHA mortgages
  • Significant reductions in maximum loan amounts
  • Raising the fees Fannie Mae and Freddie Mac charge lenders to guarantee loans
  • Retaining already existing add-on fees now charged by Fannie Mae and Freddie Mac
  • Toughened loan criteria may require those looking for the best rates to put 20-30% down at purchase; the other people will need to pay significantly higher rates.

    More: End of a mortgage era – Kenneth Harney, The Real Deal

    Leave a Comment