The biggest credit news this week is all about the planned changes to mortgage giants Fannie Mae and Freddie Mac.
With the light dimming for Fannie Mae and Freddie Mac, the two mortgage giants currently under government control, Congress is trying to figure out how to divest the federal government from the mortgage market without too much turmoil.
A plan in Congress to wind down Fannie and Freddie by 2018 could mean some big changes for borrowers. Primarily, the government could move away from guaranteeing larger loan amounts. No changes will be made to the current housing structure until Congress returns from its August recess.
President Obama gave a speech Tuesday stressing the importance of improving and changing the infrastructure of the housing market, primarily in winding down the government’s involvement in mortgages.
Obama also pushed for an independent regulator of the capital markets, similar to current legislation in Congress proposing a Federal Mortgage Insurance Corporation that would allow lenders to continue offering 30-year mortgages. Another suggestion from the President’s speech was to allow an easy gateway for all homeowners to refinance. This option would save the average homeowner $3,000 a year, reportedly.
While many potential homebuyers are jumping into the market right now due to rising mortgage rates, not all of them should be chomping at the bit. In fact, sometimes it pays to wait to get a mortgage.
As mortgage pro Scott Sheldon explains, things like bad credit or not having enough money saved to cover closing costs and a down payment mean you might be better off waiting before jumping into the housing market. Read the full article for more.