A good mortgage friend of the Kaspar Team, Eleanor Thorne of New Garden Mortgage, recently sent us some important info we wanted to pass on:
Dear Friends:
WATCH OUT!!! Last month Fannie Mae and Freddie Mac announced new loan level adjustments. They are moving to a risk based pricing model, no doubt in response to recoup foreclosure losses and mitigate future losses. These adjustments will mostly be based on FICO score and DOWNPAYMENT. Currently, Fannie and Freddie conforming loans require a 620+ FICO for "standard pricing." Higher FICOs, of course, might entitle someone to slightly better pricing.
With these announced changed (they go into effect March 1, 2008) there will be additional loan level pricing adjustments for FICO scores below 680. If the Loan-to-Value (LTV) is greater than 70% (THAT's RIGHT NOT THE 80% LTV we are all use to - now you will need 30% investment for best pricing ), the pricing adjustments are as follows:
The following table illustrates the rates and costs for a borrower with a loan amount of $300,000.
Credit Score Delivery Fee Rate Cost
Below 620 2.00% $6,000
620-639 1.75% $5,250
640-659 1.25% $3,750
660-679 0.75% $2,250
If you didn't think knowing how to work with credit was important, now you know it is!
This new risked base pricing will be on Conforming Fixed (Greater than 15 year) and ARM programs. Other Fannie/Freddie programs like the My Community Mortgage (MCM), Expanded Approvals (Levels 1, 2 or 3), Home Possible, FHA/VA and Jumbo loan products will not be affected.
Most banks have not adopted these changes (YET!). With all of the changes in the Mortgage Market in the past few months, this will likely have the most significant impact. Some have said that this equates to "double dipping on the risk assessment." I personally think it's like TRIPLE dipping because the threshold is now a 30% investment!
Conforming loans have always been priced based on risk. Mortgage Insurance is still required if the LTV is less than 80%. There's no news yet if some investors will now require insurance down to the 70% threshold - and there's no way to know if the Mortgage Insurance Companies will raise their rates - but it seems logical that they will.
Bottom line is - the cost of obtaining a mortgage WILL go up in the coming weeks. The public is going to hear that the Fed is cutting rates (potentially next week) and think they can get a deal. Well, the jobs numbers today were inflationary, and with the added fees from Fannie and Freddie, the public might be in for a shock!
You can contact Eleanor (below) be sure to tell her Vic Kaspar and the Kaspar Team recommended you give her a CALL!
Eleanor Thorne, New Garden
Email: eleavor@gmail.com
Website: http://stevethorneonline.com
Office Phone: (919) 649-5057
Description:
I've lived in North Carolina all of my life! I love it here! SELLING MONEY is a little more difficult these days - but it's still a GREAT BUSINESS to be in!
Submitted by Vic Kaspar, lead Broker, Kaspar Team, ReMax United, Cary, NC. One of the top selling agents for Raleigh NC real estate!
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment