Mortgage Rates are Going Up for Investors – How this Affects You

Fannie Mae and Freddie Mac are starting to take action to raise mortgage rates for investors buying rental properties as well as second and vacation homes. These rates increases are because they have decided to buy about half the normal number of non-owner occupant mortgages, and originating lenders have to increase fees in case they can’t sell the loans on the secondary market.

The biggest fees and as much as 5% up front by Fannie Mae on select investor purchases, regardless of the downpayment amount. There is also a significant increase in the mortgage interest rate for people buying second homes and vacation homes. Most lenders consider a second home an investment, since many people rent those out as short or long term rentals.

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