Even as mortgage rates continue to rise, buying opportunities remain – especially for the self-employed. Learn more about the current state of the industry in this week’s Mortgage Monday update!
Rates Update
Last week, mortgage rates jumped to their highest since the start of the pandemic. Freddie Mac expects this to continue, citing inflation and economic growth as causes of the increase. Like previous weeks, this is on par with predictions of a “new normal” for rates and the mortgage industry in 2022. But let’s dive deeper…
The start of last week saw relatively little change in mortgage rates. It wasn’t until Thursday, when the Bureau of Labor Statistics released their January Consumer Price Index, that markets reacted and adjusted based on new inflation numbers – the highest in years. Then on Friday, news of Russia’s potential invasion of Ukraine caused markets to shift accordingly; we’ll continue to monitor this variable as it may affect mortgage rates in the future.
For now, contact your Total Mortgage loan officer if you’ve been considering any type of home financing. We only expect rates to continue rising through this year, so be sure to lock yours in sooner rather than later.
FHFA Retires Restrictions for Self-Employed Borrowers
Good news for self-employed borrowers! At the start of February, the Federal Housing Finance Agency (FHFA) lifted its restrictions on borrowers with self-employment income. These were originally put in place in response to the pandemic but have since been removed, offering borrowers greater opportunities in an already competitive market. The same credit and income requirements may apply, but home financing is now generally more accessible for the self-employed.
If you are self-employed and considering a new home purchase or refinance, we have many loan officers available to help. Contact us or find a banker to get started.
Older, But Still Important News
The Federal Housing Finance Agency (FHFA) announced upcoming fee increases for certain Fannie Mae and Freddie Mac home loans. Effective April 1, 2022, upfront fees for these options will have the following increases:
- Upfront fees for high-balance loans will increase between 0.25 and 0.75 percent.
- Upfront costs for second home loans (non-primary residence) will increase between 1.125 and 3.875 percent.
These increases will ultimately depend on each product’s loan-to-value ratio. “High-balance” loans qualify as any that go above the conforming baseline limit introduced on January 1 – more information on that below.
Last month, the borrowing limits for Conventional and Federal Housing Administration (FHA) loan options saw significant increases to help buyers combat rising market prices. The conforming limit for single-unit home loans is now $647,200 – an 18.05 percent increase from last year’s limit. To learn more about these changes and your new borrowing options, get in touch with your Total Mortgage loan officer.
In Closing
2022 continues to serve as a revitalizing year for the economy (and in turn, the mortgage industry). We expect rates to rise in the coming months as the labor market grows stronger, so be sure to contact us and lock in a low rate now.
In the meantime, we’ll continue to monitor our industry news and keep you updated. Enjoy the rest of your week!
Source: totalmortgage.com