Here’s how the rate news could affect your mortgage

If you follow the financial news, you know that the Fed recently had one of their scheduled meetings to discuss and comment on policy.

First, who is the Fed?

The Federal Reserve Board (the Fed) is the central banking system of the U.S. The Fed supports the U.S. economy with monetary policy.

The Fed indicated it could start raising rates in 2022. These are charges for overnight loans from bank to bank and will often indirectly impact mortgage rates. 

The Fed also expects to begin tapering its asset purchases “soon,” as early as its next meeting in November. The Fed began regular large-scale purchases of U.S. Treasuries and mortgage-backed securities in March 2020 to help lower long-term interest rates and stimulate the economy.

How will this affect your mortgage?

While neither of these actions directly impacts mortgage rates, either can have the result of pushing rates higher, even in advance of actual Fed rate policy changes.

What should you do?

Consider that today’s low rates aren’t likely here to stay long term. If you are thinking of purchasing or refinancing, it may pay to act soon. As well, if you’ve been thinking about purchasing a second or investment home, a recent change has made rates and availability of agency backed financing better. 

Thank you for allowing us to provide you updates on industry news. Please reach out to Erin the Expert who can answer questions or help you or those you love with financing (or refinancing) a home.

If student loans are keeping you or someone you know from homeownership, help may have arrived.

The Federal Housing Administration (FHA) has changed the way student loan payments are counted when determining eligibility for federally insured mortgages.

The change is particularly helpful for student loan borrowers who are on an income-based repayment plan; whose loans are in an approved deferment or forbearance; or whose loans are not fully amortizing.

Previously, lenders were required to count 1% of the outstanding student loan balance toward monthly debt payments in those situations. That amount has been cut in half or even more in some cases.

If you or someone you know was previously unable to finance a home because your student debt load was deemed too high, let’s try again. Let's see if we can get you into the home you’ve always wanted.

Contact us today to get the process started or to learn more about these changes and how they could benefit you. 

Just wait until you see what’s happening in 2021!

2020 may have been the year of “unprecedented” everything, but when it comes to the housing market, 2021 already has it beat.

And we mean that in the best possible way. Let's take a look...

1. House prices are rising at record rates. The Federal Housing Finance Agency's most recent House Price Index report showed an annual growth rate of 15.7% and monthly rate of 1.8% for April—both passing previous highs. For current owners, the changes mean higher home values and equity.

2. Interest rates are back down again. After flirting with an upward trend early in the year, interest rates have come back down. Lower rates contribute to continuing affordability even as prices rise.

3. New programs are opening more doors:

   1. The FHA paved the way to homeownership for many more student loan borrowers by changing the way student loan payments are counted when determining eligibility for federally insured mortgages.

   2. New programs coming online this summer are helping eligible lower income borrowers save money through refinancing by reducing costs and making it easier to qualify.

4. Homeowners are accessing cash from equity and dropping mortgage insurance (MI or PMI). Even for those who already refinanced once, the combination of rising values and low rates is allowing homeowners to fund repairs or renovations; invest in second homes; pay for college tuition; or just follow their dreams.

All of this, and the year’s barely half-way over!

Do you have questions about what the 2021 housing market means for you or someone you know? Please reach out. The Greenway Team is happy to help!

The Federal Housing Agency (FHA) has just increased the amount of money that can be borrowed through its mortgage programs by nearly $25k in most areas. In high cost locations, the increase is even greater. New limits will take effect in 2021.

The increases will allow more borrowers to take advantage of FHA’s benefits:

• Low down payment options
• Lower total cash-to-close requirements with gift or seller contributions
• More lenient and streamlined refinancing
• Ability to combine purchase and rehab financing
• In some high-cost areas, higher loan limits than conventional mortgages

Here are the specifics:

• In most areas, the FHA loan limit will be $356,362, a 7.4% increase over 2020’s limit of $331,760.
• In high cost areas, the limit moves to $822,375, a 7.4% increase over 2020’s $765,600.
• In some lower-cost areas or those with higher costs of construction, limits will vary.

Contact your Greenway Mortgage loan officer today for more details about how the increase can impact you.

New 2021 Loan Limits Effective January 2021

On November 24, 2020 the Federal Housing Finance Agency (FHFA) announced an increase in the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2021.

The maximum loan limit for one-unit properties will be $548,250 an increase from $510,400 in 2020. Release.

The decision was based on the recovery of housing prices under the Housing and Economic Recovery Act of 2008 (HERA). They require that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price.  

FHFA third quarter 2020 House Price Index (HPI) reported that house prices increased 7.42%, on average, between the third quarters of 2019 and 2020. The baseline maximum conforming loan limit in 2021 will increase by the same percentage.

For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit. 

A list of the 2021 maximum conforming loan limits for all counties and county-equivalent areas in the country can be found here.

WHAT DOES THIS CHANGE MEAN FOR HOMEOWNERS AND HOMEBUYERS?

This means YOU may be able to:

• Purchase a higher priced home with more financing options, possibly including lower rates.

• Refinance an existing, higher-rate “jumbo” loan and possibly drop mortgage insurance.

• Combine 1st and 2nd mortgage

Contact your Greenway Mortgage loan officer today for more details about how the increase can impact you.

2021 Conforming Loan Limits Effective January 2021