Recently, Fannie Mae made changes that could affect fixed-rate mortgages and student loan refinancing.
As of June 29, the 30-year fixed-rate mortgage is down to 3.88% from 3.90% two weeks ago. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.48%.
Additionally, the 15-year fixed-rate mortgage averaged 3.17% and has maintained this rate the past two weeks. At this time last year, the 15-year fixed-rate mortgage was 2.78%.
We can see the effects of the interest rate hikes from March, after the Federal Reserves raised its benchmarks. The higher rates are a signal of a stronger economy, which is also associated with a stronger real estate market. As the economy continues to grow, we can expect two more rate hikes by the end of 2017.
And for the borrower with student loans, refinancing just got easier.
Fannie Mae announced new policies that address challenges of homeownership due to significant increases in student debt over the past decade. The new solutions give homeowners the opportunity to pay down student debt with a mortgage refinance.
The new policy also widens the borrower’s eligibility to qualify for a home loan by excluding debt-to-income ratio on non-mortgage debt. These include credit cards, auto loans, and student loans, paid by someone else.