Here’s what you need to know about the recent mortgage rate hike.
Recently, Fannie Mae sent out a letter to all their mortgage providers saying that they’re going to limit the number of secondary home and investment mortgages in their inventory down to 7%. That means the companies who provide those loans had to make quick adjustments, some of which include higher rates and stricter lending rules. So how will this affect you as a consumer?
If you’re in the market to buy your primary residence, you won’t be affected. But if you’re buying a second home or an investment property, the change is a huge deal. Rates could go up as high as 4.5%, which means your purchasing power will decrease. And if rules are stricter, that means your credit score will have to be higher, you’ll have to put more money down, or you’ll have to look stronger on paper.
If you’re buying a second home or an investment property, this change is a huge deal.
This has been quite a shock to the industry, especially in Flagstaff. Many of our buyers are second-home buyers, and everyone knows that as the weather gets warmer in Phoenix, so too does the real estate market in Flagstaff.
The good news is that if you’re buying a primary residence and your loan is owner-occupied, you might have an easier time finding a property since second-home buyers will face more restrictions.
If you have any further questions about these changes, contact your mortgage lender, but remember that these changes aren’t the lender’s fault—this happened quite suddenly. If you have any questions about the market or buying and selling homes, don’t hesitate to reach out to us. We’re happy to help.