You read that correctly! Beginning November borrowers will not have access to 3% down mortgages through Fannie Mae. The minimum down payment will increase to 5%, forcing borrowers to turn to FHA with a higher cost due to Mortgage Insurance. Don’t forget, FHA’s mortgage insurance is now permanent, which drives up mortgage payments for the duration of the loan.
The why behind the action isn’t stated, but it appears to be pushing more borrower’s with less skin in the game to FHA products and away from Fannie Mae.
If your loans are registered and pre-approved by November 15th and closed by March of 2014 you will be able to take advantage of the old rules.
Just another change to the system, making it harder for borrowers and slowing down the anemic housing recovery nationally. Fortunately NY’s Capital Region, Albany, Saratoga, Schenectady, Malta, Troy and surrounding areas, remain stable and strong due to the growth of the tech industry in our area.
The bottom line is that it is still get harder, not easier, to be a buyer! Call us at Victory Funding at 518-899-7700 to get started today!
