The Upfront Mortgage Broker

Rates Are Falling but Costs Are Rising

Even though its effective date is April 1, 2009, mortgage applicants should start seeing Fannie Mae’s new fee structure from lenders beginning this Monday, January 12.

The reason why Fannie Mae’s mandatory loan fees are hitting lender pricing so far in advance is because lenders can take up to 30 days to package and sell a loan to Fannie Mae post-closing. In effect, this moves the April 1 start date to March 1.

Mortgage rates may be falling in Florida and elsewhere, but if applying for a new home loan gets cost-prohibitive, it just doesn’t matter.

Remember, though, these changes are for Fannie Mae-bound mortgages only. I bring up that distinction because they are plenty of loans that don’t get sold to Fannie Mae and it’s not always clear what those loan types are. Non-Fannie Mae loans include:

* “Jumbo” or “super jumbo” mortgages
* FHA mortgages and VA mortgages
* Niche-lender and portfolio loan products

And, as an exception to its rules, Fannie Mae is giving a free pass to people with 15-year terms or less. Homeowners with a 15-year or 10-year fixed rate mortgage aren’t subject to the new loan-level pricing adjustments.

The majority of rate shoppers, however, are looking longer than 15 years; they’re looking at conforming-sized mortgages of the 30-year fixed rate variety.

If that’s you, stop looking and start locking. Call or email me when you’re ready.

If you have any questions about this post or need to talk about a specific situation, I encourage you to contact me today.

Respectfully,
Joe Bartolotta
The Florida Upfront Mortgage Broker
No Charge Mortgage Consultations
Residential, Commercial & Reverse Mortgages
Direct 407.340.0220
Joe (at) the upfront mortgage broker (dot) com