November 14th, 2013
The big news is Freddie Mae and Fannie Mac. It’s cheaper to get a jumbo loan than a FHFA loan, there are rumors that the government may be looking to sell off Fannie Mae and Freddie Mac, and your insurance rate may be affected by your roof.
Read on for today’s selection, and as always post your thoughts in the comments. And if you have questions about mortgages and rates, contact a qualified loan officer.
CNN/Money is reporting that people obtaining jumbo loans from regular lenders are paying about a quarter of a percentage less than those obtaining loans through Freddie Mac and Fannie Mae.
One reason they’re lower is that lenders want to attract wealthy clients and hang on to them, said Malcolm Hollensteiner, head of consumer lending for TD Bank. Once clients sign up for a mortgage, the bank can “cross sell them other products, like brokerage services,” he said.
Additionally umbo loans have also gotten comparatively cheaper while fees for Fannie Mae and Freddie Mac have increased.
So, we found the article on the Financial Times about Congress looks to future without Fannie and Freddie (if you go to the site, you have to register. They do have a free option).
President Barack Obama said in August that he supported an approach to “end Fannie and Freddie as we know them,” and some lawmakers in Congress have made finding an alternative solution for America’s housing finance agencies a priority.
So the Senate Banking Committee has been evaluating if there is a need for further government involvement and if there is enough private capital to take over Freddie and Fannie.
It doesn’t look like anything will be changing in the near future.
UPDATE: Last night, the Wall Street Journal released an article that the Fairholme Capital Management group announced it would like to buy parts of Fannie Mae and Freddie Mac from the government in a recapitalization valued at $52 billion. So, the story does get more interesting.
You may take your roof for granted (until it leaks), but to an insurance company, it’s extremely important because it protects the home against wind, rain, snow, hail, and whatever else Mother Nature decides to throw.
Because insurers have a vested interest in your roof, they price your home insurance accordingly, based on the soundness of its construction and what it will cost them to replace it. Note also that premium incentives and disincentives for roof types vary widely by company and location.
“If you live near a wildfire zone, you pay a lot if your roof is (made of) cedar shakes compared to asphalt shingles that are flame-retardant, or a metal roof that doesn’t burn,” says Robert Hunter, director of insurance for the Consumer Federation of America. “Some companies won’t even insure certain roof types, such as wood shakes, in high fire-risk areas.”
Different roofs have different costs, lifetime expectancy, and return on investment.