As you might have heard, or read about, the Guaranty Fee for all Government Sponsored Entities (Fannie Mae and Freddie Mac for example) was increased in order to pay for the extension of unemployment benefits. This will affect all loans delivered to Fannie and Freddie beginning April 1, 2012.

While April 1st may seem far away, most loans that are closed after March 1st will be “pooled” and sold after April 1.  This increase can mean a rate increase by .125 – .250.  All lenders will be adding this increase to their rates. Some all at once and some a little at a time in order to protect themselves for any loans being pooled beginning 2nd quarter.

FHA loans will also be effected by this increase.  You should expect changes in the Upfront Mortgage Insurance Premium or Monthly Premium (or both).  As of today, HUD has not indicated when or how they will handle their side of the equation.

What does this mean for the buyer?  Get busy.  This small increase on a $150,000 loan can mean approx $9000 more over the life of the loan.  What if a customer barely qualifies

Freddie Mac

Image via Wikipedia

and now we know for certain rates will increase.  Their preapproval may be null and void.  What does this mean to the agent?  Let your buyers know.  They need to make informed choices.  Spread the word and let’s make it happen.

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