Rate Increases Ahead
Mortgage costs will increase for many borrowers in 2014. Fannie Mae and Freddie Mac plan to raise lender fees, which will likely translate into increased rates for those seeking loans. These fees could particularly impact borrowers who lack a strong down payment or have less than perfect credit scores, although those with higher down payments will likely also see increases.
According to Fannie Mae, borrowers with 30-year fixed-rate mortgages and a 10 percent down payment can expect fees to rise from 0.75 percent to 2 percent if they have a credit score of 735. Borrowers with a 750 credit score can expect fees to rise from 0.5 percent to 1.5 percent. Those with a credit score of 775 or higher could see an increase in fees from 0.5 to 1 percent.
- The Changing Landscape
Talk to a Realtor® about how higher rates might impact their clients. Talk to mortgage lenders in your area about what borrowers can expect. Chat with borrowers to see if they are aware of the coming changes.