It’s been a rough week for rates. Yesterday the FED announced it will start tapering and the rates increased approximately .125%. The bigger hit came Monday when Fannie Mae announced their new pricing adjustments. These new fees go into effect for loans purchased after April 1st, 2014. That means most lenders will start changing their fees now. Take a look at the chart below. For a 5% down mortgage with a 720 credit score the hit is currently .5% (basically .125% in interest rate). The new fee is 2%! That is roughly .375% in interest rate! Wow! So, in one day, we basically saw the rates rise .5%. That’s rough.
This is just a nasty hit. A 20% down 800 credit score gets hit .5%? That’s brutal. In my opinion, this is not a good time for these increases. The housing market is starting to come back somewhat and these increases will not help housing. They will only hurt.
