Wednesday, September 5, 2012

Consumers - Time to Lock - FHFA Increasing Guarantee Fee

Although normal market data indicates a pending bias up in rates, the government will add to the mortgage rate increase through "Guarantee Fees" in the next 60 days.

These fees are used to fund tax cuts, mitigate risk, and for various other reasons determined by Congress.

Although we have forecasted the natural increase in rates based on economic data, Nov 1 rates will be even higher due to this G-Fee being passed on to the consumer via Fannie Mae and Freddie Mac Mortgage Rates.  FHA is one way to avoid the higher cost.

Purchasing or Refinancing, September and October will be the period to save a few dollars.  Be sure you select a Mortgage Lender that has a Federal and State License to ensure this important transaction is monitored by a Mortgage Loan Originator, MLO, who has passed the competency tests set forth by our Government. 

Ensure your Mortgage Originator is Licensed @ 

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Once you have a Licensed MLO, you will want to close fast.  8-Day Close, Licensed MLOs, Great Rates,
Call 770-279-0222 or visit .
Ask if an FHA loan is right for you!

"Fannie Mae and Freddie Mac, the U.S.-owned mortgage-finance companies, will raise by an average of 10 basis points the fees they charge lenders to guarantee loans, the Federal Housing Finance Agency said in a statement."

"The guarantee-fee increases, which begin taking effect in November, probably will be passed on to borrowers in the form of higher interest rates and are small enough that they won’t stall mortgage lending, banking-industry trade groups said. "

"An increase of 10 basis points would cost a borrower with a $200,000 mortgage about $4,000 over a 30-year loan term."

"The fee increase will begin Nov. 1 for loans sold for cash and Dec. 1 for loans exchanged for mortgage-backed securities, FHFA said."

"The last guarantee-fee increase took effect in April after Congress boosted them by 10 basis points to fund a payroll tax cut. It was the first time fee proceeds had been diverted into the U.S. Treasury instead of helping offset the risk borne by Washington-based Fannie Mae and Freddie Mac (FMCC) of McLean, Virginia.
The average guarantee fee charged by the two companies rose to 28 basis points in 2011 from 26 basis points in 2010, according to a report FHFA also released yesterday. By the end of the year, after both increases are in effect, fees could average about 48 basis points."


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