Jan
14

Fannie Mae Products are about to get MUCH More Expensive for San Diego Mortgage Loans AGAIN!

By

January 14 2011

Let me start by stating the fact that 75% of loans in San Diego and across the country are Fannie Mae and Freddie Mac products.

Both GSE’s started with a call “risk-based pricing” to be able to price in risk from borrowers who have lower credit scores. It looks like these fee-based premiums are now for most Freddie Mac and Fannie Mae loans even for borrowers with stellar credit.

Under the new pricing borrower with 800 credit score is putting 24% down will have to pay .25% to fee. To put this in perspective on a $400,000 loan that’s $1000 more in fees. A borrower with a 679 score at 79% loan-to-value would be hit with an astronomical 2.75% fee on the same $400,000 house that’s $11,000 in fees! Some of the other new adders are for condominiums there is a .75% fee and there is an adverse market fee which is pretty much every neighborhood in the country (according to Freddie and Fannie ) of .25%.

I understand the risk-based pricing model is to charge more for borrowers who pose more risk but it seems now that everybody needing a loan is seen as a risk by the GSE’s.

This is only a few of the price increases that make it nearly impossible for San Diego home buyer to get that ” billboard” interest-rate that most companies advertise.

 San Diego Home Mortgage Fannie Mae

Above is a chart of a few of the price adds that go into effect next week. Please note that none of these ads apply the 10 or 15 year mortgages.

If you or someone you know can use my help or advice on a home mortgage product or guideline please call me at 619-285-2921 or APPLY HERE 

Comments

  1. Babs Fry says:

    Joe,
    Your commentary is SPOT on as usual. Very helpful.