Investment property mortgage rates up - Fannie Mae changes

[Erik Sherburne]

Anyone else see this?

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

It was sent to me by my broker.

Short version, Fannie Mae is reducing their 2nd home/rental property portfolio to 7% of the overall loans purchase which means higher rates for us.

[Josh Chastain]

@Erik Sherburne I'm in the middle of refi and this has directly impacted me. Last Friday, 3/12, 3pts = 3.375% now according to the lender its 3pts = 3.75%. Guess I should've moved faster.....This is for a duplex in the Columbus, OH. Although the news article, linked below, states it goes into effect April 1st but I suppose since the news is out the market has already adapted so even if I switched lenders it wouldn't matter. 

-----the email form the lender does a better job describing the change and perhaps will help somebody else, see below------

Below are the current rate options. Effective late Friday our industry put a new loan level price adjustment in play thanks to the limitations Fannie Mae put into place - http://www.mortgagenewsdaily.com/03112021_loan_underwriting.asp
With that said here is the option based on a value of $190k and a loan amount of $133k - 70% LTV.100.00 is the 'par' no cost option. Anything under and we have to charge as a 'discount' to get back to 100.00.We could offer 3.75% for a cost of 3pts

If we're able to keep the LTV under 60% there's a bit of savings.The LLPA's are much less and we'd be at 3.625% for 2pts.

[Brandon Sturgill]

3pts...that hurts my feelings

good info...thanks for providing @Josh Chastain

[Josh Chastain]

@Brandon Sturgill does it seem reasonable in your opinion?

I went for points to increase cash flow since I plan on holding it for 10 years. Thoughts?

[Rick Novotny]

Interesting read. Thanks for sharing this.

[Alex Forest]

@Erik Sherburne This is being discussed in another thread.

https://www.biggerpockets.com/...

It was indicated there, one Lender saw the potential for a 1.5% premium for investor and 2nd homes over owner occupied rates.

@Josh Chastain a 3.75% rate still sounds reasonable to me in the grand scheme of things. That's a pretty good long term fixed investor rate to lock in. 

[Liz Baker]

I called TIAA today to see about refinancing a SFR Investment property that I have in Georgia at 6%. $108k balance, worth $200k. He quoted me at 5.375 - 5.625 at first..until I told him balance and Value, then he said probably 4.875-5.375...I was shocked.

Just two weeks ago it was Much lower!! I am the middle of closing another investment property so wanted to wait until that one closed before I refinanced, per my lenders request.      

[Brandon Sturgill]

@Josh Chastain It requires an actuarial scientist to figure it out 100%, lol...I guess if it works out in the wash it's worth it....are there lender credits available? 

[Alan Lacey]

Well rates are also up over a .5% since feb 25. Many lenders have added pricing adjustments for seconds and additional adjusters for rentals (there were significant ones already), but just as many have not. When comparing lenders for conventional financing that is the first question I would ask ( if they have adjusters or and above standard Fannie/Freddie loan level price adjusters for these types of occupancy.