The start of the New Year has already proven to be an eventful one for the mortgage industry. With increasing rates, upcoming fee announcements, and new borrowing limits, it’s more important than ever to stay updated with the latest information. Let’s get started with this week’s Mortgage Monday update!
Rates Update
The first week of 2022 brought expected rate increases that will likely continue into the New Year. On January 6, Freddie Mac reported “the highest level [of mortgage rates] since May 2020” with significant increases for both 30-Year and 15-Year options. This is the result of growing inflation and increased economic activity – even in the face of continued Omicron developments.
Despite all of this, mortgage rates are still relatively low; how much longer they will remain low, however, is up in the air. This much of an increase this early into the year should be taken as an indicator of more rate growth to come, so contact your Total Mortgage loan officer today if you’ve been considering a new home purchase or refinance.
FHFA Announces Upfront Fee Adjustments for High-Balance Loans
Last Wednesday, the Federal Housing Finance Agency (FHFA) announced upcoming fee increases for certain Fannie Mae and Freddie Mac home loans. Effective April 1, 2022, upfront fees for these options will have the following increases:
- Upfront fees for high-balance loans will increase between 0.25 and 0.75 percent.
- Upfront costs for second home loans (non-primary residence) will increase between 1.125 and 3.875 percent.
These increases will ultimately depend on each product’s loan-to-value ratio. “High-balance” loans qualify as any that go above the conforming baseline limit newly introduced on January 1 – more information on that below.
The main takeaway from this announcement: if you’re in the market for a higher-than-usual home loan or financing for a second property, now is the time to act. With mortgage rates increasing and updated fees coming in April, securing a home loan sooner than later will save you money in the long run. Contact your Total Mortgage loan officer to get started.
Now In Effect: New Borrowing Limits for Conventional and FHA Options
At long last, the 2022 borrowing limits for Conventional and FHA loan options are now in effect. These changes were originally proposed in late 2021 with the intention of combating rising market prices – and as of January 1, they’ll be offering more spending power than ever to borrowers everywhere. The conforming limit for single-unit home loans is now $647,200 – an 18.05 percent increase from last year’s limit.
Federal Housing Administration (FHA) loans also received some attention with updated borrowing amounts for 2022. See below for a full breakdown of your new options and contact your Total Mortgage loan officer if you have any questions.
In Closing
Even with just one week now in the books for 2022, we already have plenty of news to keep in mind and industry variables to monitor. If you’ve been considering a new home purchase, now may be the time; mortgage rates have remained low in recent months but are now following the upward trend experts have been anticipating.
For now, enjoy the rest of your Monday and contact us if you have any questions. Thanks for reading!
Source: totalmortgage.com