Big hit for investment mortgages

[Yogesh Bhadane]

I am seeing significant increase in investment loan interest rates due to recent announcement from Fannie Mae.

They are limiting investment loans intake and Lenders are asking significant down payment like 25% with 4.65% interest rate.

How is this affecting rental home investors?

http://www.mortgagenewsdaily.com/channels/community/969950.aspx

[Yogesh Bhadane]

@Mike Hern

Yeah. Most lenders charging extra for points.

Below is the snapshot—-

Fannie Mae announced March 10 that they are limiting new loans secured by second homes or investment properties to 7% of the overall loans they purchase (roughly HALF their historic levels!), effective April 1. What does this mean to borrowers seeking investment/2nd home mortgages? Turns out, it means A LOT.

Bottom line, demand for second homes and investment properties will be greatly impacted by Fannie's policy. Expect to see far more cash buyers for these situations, and (more than likely) far fewer bidding wars as the new pricing adjustmentsraise rates and costs. Outside investors may eventually purchase more of these loans (which is FHFA's goal), but for the moment, prepare to pay substantially higher costs, or cash for that getaway condo or rental property!