Hi! It’s Tom Heath with the Heath Team at Nova Home Loans and this is our weekly update on Mortgage and Real Estate Related Matters. And this week’s topic is on second homes and investment properties.
We’ve talked about this before and it’s really starting to show an impact now with our consumers in that Fannie Mae and Freddie Mac announced earlier this year that they were going to be limiting their portfolio to about 7 percent for second homes and investment properties. This reduction in their willingness to their willingness to purchase has meant that interest rates are moving up on those homes.
We used to see very similar rates for a primary residence versus a second home. And now we’re seeing a little bit of a spread. Investment properties have always been higher and they’re starting to move up even more right now. Also, underwriters are paying a little bit more attention to primary residence purchases because with a spread on the secondary homes being little bit higher, the underwriter wants to make sure that this home truly will be the consumer’s primary residence.
So the guidelines are a little bit stricter and the rates are moving up. Not to a large degree, but that shift is happening. Just want you to be aware of it. You have any questions? Give us a call, or check out TheHeathTeam.com, or shoot us an email. My name is Tom Heath and we’ll see you for another episode next week!