What's Behind The Blue Door of Real Estate?
As part of the Temporary Payroll Tax Continuation Act of 2011, Fannie Mae and Freddie Mac are required to increase their Guarantee Fee (G-Fee) by at least 10 basis points (1/100 of 1%) beginning April 1st. This money will be paid to the US Treasury.
What does this means to us? Conventional mortgage rates will go up to compensate for the increase in the G-Fee. It is expected that rates will go up more than the required 10 basis points because of the uncertainty of where this is going. Most lenders are increasing the rates in the next few weeks - some have already done so.
This will only affect Fannie Mae and Freddie Mac loans (Conventional Loans).
Note to Buyers who are pre-approved with Coldwell Banker Mortgage: It is a good time to go ahead and lock into our Pre-Purchase Rate Protection loan (PPRP). If rates go down, you can float down one time before closing. This gives you 90 days to find a house with the assurance that your rate will not increase.
If you need to get pre-approved or would like to know more about the PPRP program, please contact Melanie Troutman or Mike Kirkpatrick with Coldwell Banker Mortgage.