Costs Rise on Two Types of Mortgages
The cost to for a mortgage loan on a second home is going up substantially on April 1st. And that’s no joke.
The party’s almost over. Fannie Mae and Freddie Mac are poised to charge substantially higher fees on second home and super conforming mortgages, effective April 1st. This means borrowers will see these costs added almost immediately, even for loans closing well before April 1st. By the time you read this, it may already be happening.
Second home loans have increased by a whopping 1.125%-4.125%, which puts them in the same cost range as investment property loans. This means that Fannie and Freddie consider second home loans to be as risky as investment property loans. This is quite a change—until now, second home and primary residence loans were similarly priced.
Fannie and Freddie also raised fees on super conforming loans—those that exceed the national limit of $647,200 for single-family homes. Super conforming loans are available in certain metros where houses cost more. These fees have increased by .25% to .75%.
A borrower may not notice the slightly higher cost on super conforming loans, but the hefty increase definitely will not escape the attention of second home buyers.
When you have questions, our lending partners have the answers. Please get in touch!
