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Mortgage Monday – Week of January 3

The start of the new year has already been very eventful for the mortgage industry. With rising rates, upcoming fee announcements, and new borrowing limits, it’s more important than ever to stay up to date with the latest information. Let’s start with this week’s mortgage Monday update!

Update rates

The first week of 2022 brought some expected rate hikes that will likely continue into the new year. January 6th, Freddie Mac reported “The highest level [of mortgage rates] since May 2020 ”with significant increases for the 30-year and 15-year options. This is the result of rising inflation and increased economic activity – even in the face of continued Omicron developments.

Despite all this, mortgage rates are still relatively moo; how long they will stay down, however, is in the air. This large increase at the start of the year should be seen as an indicator of stronger rate growth to come, so contact your Total Mortgage loan officer today whether you are considering buying a new home or refinancing.

FHFA announces upfront fee adjustments for high balance loans

Last Wednesday, the Federal Housing Finance Agency (FHFA) announced upcoming fee increases for certain mortgage loans from Fannie Mae and Freddie Mac. As of April 1, 2022, the initial charge for these options will increase as follows:

  • The initial charge for high balance loans will increase between 0.25% and 0.75%.
  • The initial charge for second home (non-primary residence) loans will increase between 1.125% and 3.875%.

These increases will ultimately depend on the loan / value ratio of each product. ‘High balance’ loans are considered to be those that exceed the newly introduced compliant benchmark limit on January 1 – more on that below.

The main takeaway from this announcement: If you’re looking for a higher-than-usual mortgage or second home financing, now is the time to act. With mortgage rates rising and fee updates coming in April, getting a home loan sooner rather than later will save you money in the long run. Contact your Total Mortgage loan officer to get started.

Now in effect: new borrowing limits for conventional and FHA options

Finally, the 2022 borrowing limits for conventional and FHA lending options are now in effect. These changes were originally proposed in late 2021 with the aim of tackling rising market prices – and from January 1, they will offer more purchasing power than ever to borrowers around the world. The compliant limit for single-home mortgage loans is now $ 647,200, an 18.05% increase from last year’s limit.

Federal Housing Administration (FHA) loans have also received some attention with updated loan amounts for 2022. See below for a full breakdown of your new options and contact your Total Mortgage loan officer if you have questions.

In closing

Even with only a week on the books for 2022, we already have a lot of news to keep in mind and industry variables to watch out for. If you are considering buying a new home, now may be the time; mortgage rates have remained low in recent months, but are now following the upward trend forecast by experts.

For now, enjoy the rest of your Monday and Contact us if you have questions. Thanks for reading!