Somewhat lost in the hubub over this past weekend’s GSE takeover, and the subsequent drop in rates (did you know most mortgage rates improved by .5% after the takeover? More on this here, or you could simply subscribe to our twitter feed for real time updates to rates) is that fact that mortgage guidelines continue to tighten.
For instance, this announcement [PDF!], from last Friday, released to little fanfare, tells us that:
- The minimum down payment for investment properties is going up, to 15%, from 10%.
- The price adjustment for the above mentioned scenario is 3.75% of the loan amount up front, (or 1% higher in rate, give or take) in additon to other adjustments based on credit score, and/or property type.
These changes, among others, don’t go into effect until Dec 1st, but most lenders will implement them much sooner than that. So for aspiring property investors and landlords being lured back into the market by lower prices, it is time to get a move on.
Bottom line – though the takeover of Fannie and Freddie has helped baseline rates dramatically, availability of mortgage money continues to contract for many types of loans.