Higher Mortgage Rates Are in the 2012 Forecast
Thanks to a recent action by Congress the days of record low rates may be ending.
To
pay for the extension of payroll tax cuts, Congress mandated an
increase in fees for Fannie Mae and Freddie Mac loans. Starting on April 1st, that means
an increase in upfront costs for borrowers of about half a point.
The average fee borrowers pay now is about 0.7%
of the mortgage balance for a 30-year and 0.8% for a 15-year, or about $700 or $800 for every $100,000 borrowed. The new fee would add $500 for every $100,000 in loan amount.
Instead
of paying upfront, borrowers could pay the fee as a higher interest
rate. That would mean an additional one-eighth of a point
to their rate. Adding an eighth
of a point to interest rates comes to an extra $225 a year or so on a
$250,000 mortgage.
_____________________________________________________________
The Highland Group
Chris & Karen Highland * 301-831-9947
Turning Point Real Estate – 301-831-8232
email us: isell4u2@msn.com
Text Us: 301-401-5119