The interest rates on mortgage loans are about to be affected once again by the actions of the Federal government. Though this time, the culprit is not going to be the Federal Reserve. It will be the Federal Housing Finance Agency (or the FHFA) which is an agency that monitors the housing market and evaluates risks.
The FHFA has decided that things are not difficult enough. And, since they have obviously not taken the Hippocratic Oath, they will be shaking it up some more. As you can imagine, most of the changes are going to be detrimental to borrowers (i.e. by increasing costs/rates) though there are some that will end up improving things.
Many types of mortgage loans will be impacted. I am highlighting some of the more common ones below:
Purchase Loans with 20% down and credit scores between 720 and 760: The rate will increase by .125%
Purchase Loans with 15% down and credit scores between 720 and 760: The rate will increase by .25%
Purchase Loans with credit scores under 660: The rate will decrease between .125% and .5% depending on the loan to value and the credit score.
Cash Out Refinances with a loan to value between 70% and 80% and credit scores between 760 and 780: rate will decrease by .125-.25%
Loans with Debt to Income Ratios over 40%: rate will increase by .125%
For more details and explanations on the above or to discuss other scenarios , please contact me any time.
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