🚨 HUGE RATE HIKES COMING ON 2ND HOMES AND HIGH BALANCE LOANS
FHFA released a bomb on Wednesday.
For loans sold to Fannie Mae and Freddie Mac after 4/1/2022, interest rate pricing will be dramatically higher for 2nd Homes/Vacation Homes And High Balance Loans.
The increase for 2nd / Vacation Homes is especially eye popping – around 1% higher on the rate for most loan to values.
A 2nd Home is a home used by the owner as a vacation home. Many clients also purchase these type of homes to use as an AIRBNB / VRBO also use personally for a certain amount of time each year.
What this means for consumers – if you were planning on buying that 2nd home in the woods or on the beach and using financing – try and get under contract asap.
Although the change takes place 4/1/2022 – most lenders will likely cut off current pricing at least 2 weeks in advance of that if not a month as it takes some time to sell the mortgage.
This means these loans will likely have to fund by 3/1/2022 or 3/15/2022 – not start.
With most close of escrows being 30-45 days , the time is ticking to get the best deal on these properties.
High Balance Loans are present in certain areas of the country that have higher median home prices. Fannie and Freddie put together a conventional loan amount for the whole country every year. This amount is $647,200 for 2022.
In areas where most homes are much higher than that, they offer High Balance Conforming Loans above $647,200.
The pricing hits for High Balance loans will result in a rate increase of approximately .375% to .5% for most customers.
Please call me if you have any questions.