Exciting changes are on the horizon for homebuyers! Starting in early 2025, Freddie Mac and Fannie Mae are making updates that could simplify the homebuying process for your clients. These changes aim to make purchasing a home faster, less expensive, and more accessible—especially for first-time buyers.

Here’s a closer look at what this change means and how it could benefit homebuyers:

What Is an Appraisal Waiver?

An appraisal waiver allows buyers to skip the traditional in-person home appraisal during the mortgage approval process. Instead, automated tools determine the home’s value based on recent sales and other market data.

Currently, appraisal waivers are available to buyers with an LTV ratio of 80% or lower. But starting in early 2025, this threshold will increase to 90%.

How Buyers Benefit from the New 90% LTV Ratio

1. Lower Down Payments, No In-Person Appraisals

With the increased LTV threshold, buyers can qualify for appraisal waivers with just 10% down. This means fewer hurdles for buyers who may not have a large down payment saved.

2. Faster Closings

Skipping the appraisal process can shave days—or even weeks—off the homebuying timeline. Automated underwriting ensures buyers can move into their new homes more quickly.

3. Cost Savings

By avoiding the in-person appraisal, buyers could save $500 or more in fees. This money could be used for other expenses, like moving costs or furnishing their new home.

4. Reliable and Safe Process

Even without a physical appraisal, lenders will rely on accurate data like credit scores and recent comparable sales to ensure the waiver process is thorough and safe for buyers.

Why This Change Is a Win for Buyers

The new appraisal waiver guidelines address some of the most common challenges buyers face, especially first-time homebuyers. Lower upfront costs and streamlined closings make it easier for more people to achieve their dream of homeownership.

If you’re planning to buy a home in 2025, this update could make the process smoother and more affordable.

Get Prepared for 2025

As these changes roll out, staying informed will help you make the most of this opportunity. Have questions about appraisal waivers or how they could impact your buying experience? Greenway Mortgage is here to help. Let’s discuss how this new policy can benefit you. Give us a call 888-616-9885 or email us at leads@greenwaylending.com.

 

On November 26, 2024, the Federal Housing Finance Agency (FHFA) announced an increase in the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2025.

The maximum loan limit for one-unit properties will be $806,500, an increase of $39,950 (or 5.2 percent) from 2024. Release.

National Baseline

The decision was based on the recovery of housing prices under the Housing and Economic Recovery Act of 2008 (HERA). They require that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price.  

FHFA third quarter 2024 House Price Index (HPI) reported that house prices increased 5.21%, on average, between the third quarters of 2023 and 2024. The baseline maximum conforming loan limit in 2025 will increase by the same percentage.

High-Cost Areas

For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit. 

List of 2025 Conforming Loan Limits For All Counties

A list of the 2025 maximum conforming loan limits for all counties and county-equivalent areas in the country can be found here.

Curious about limits in your county or other areas? Follow the link below to check. We update it with every change, so bookmark it for future reference if you'd like. 

Contact your Greenway Mortgage loan officer today for more details about how the increase can impact you.

2025 Conforming Loan Limits Effective January 2025

 

The Federal Reserve recently cut its policy rates by 0.50%, and Fed Chair Jerome Powell hinted at the possibility of further cuts this year. But what does this mean for you?

What Did the Fed Say?

The Fed's latest statement highlighted a cooling job market and easing inflation. They believe that cutting the policy rate can encourage private sector spending without risking a spike in inflation. While Powell is optimistic about future rate cuts, he emphasized that upcoming decisions will depend on the latest data.

Will Mortgage Rates Drop?

The Fed doesn’t directly set mortgage rates, but investors often anticipate Fed actions. Mortgage rates have already dipped to their lowest levels of the year, but it’s uncertain how they’ll adjust following this recent cut.

Should You Wait to Act?

Consider these factors before deciding:

1. Acting Now Might Save You More: Mortgage rates often shift in anticipation of Fed moves or in response to other economic news. Waiting might not guarantee a better rate.

2. Market Competition: A rate cut could lead to increased competition and higher home prices. Purchasing now, even at a slightly higher rate, might save you money in the long run.

3. Build Equity: By buying now, you’re investing in your own property rather than paying rent, which builds equity for your landlord. Mortgage payments build equity for you.

4. Get Ahead with Pre-Approval: Starting the pre-approval process now puts you in a strong position when you’re ready to buy.

Let’s Discuss Your Options

We offer calculators to help you compare potential costs of buying now versus waiting. Additionally, programs like hybrid ARMs, fixed-rate buydowns, and HELOCs can help manage higher rates and make your purchase more affordable.

If you’re considering buying or refinancing, now is a great time to prepare. A qualification consultation or pre-approval can set you up for success.

Background on the Fed:

• The Federal Reserve Board (the Fed) controls the federal funds rate and discount rate, which are charges for overnight loans from bank to bank or from the Fed to member banks.
• This rate was lowered to near zero in March 2020 in response to the pandemic.
• The Fed has a standing inflation target of 2%. When historic inflation hit in March 2022, they began a cycle of rate increases to slow spending and bring it down.
• September brought the first policy rate cut since the initial change in 2020.

If you’re ready to buy, refinance, or access cash from your home’s equity, don’t let uncertainty hold you back.

We’re here to help—closing loans every day!

              

 

Changes to Real Estate Transactions: What You Need to Know

As of August 17, 2024, there are new requirements for real estate transactions that could impact your buying or selling experience. Here’s what you need to know to navigate these changes smoothly:

What’s New?

For Buyers:

• Written Agreement Required: Before touring homes, either in person or online, you will need to sign a written agreement with your real estate agent if they use the MLS (Multiple Listing Service). This agreement outlines the services the agent will provide and the associated costs.

• No Agreement Needed for Open Houses: You can still speak with agents at open houses without a written agreement.

• Compensation Terms: The MLS will no longer list buyer’s agent compensation details. You will negotiate this directly with your agent before viewing properties.

For Sellers:

• Agent Compensation: The compensation for buyer’s agents remains negotiable. Many sellers may choose to cover this cost as part of the deal, which can be included in your agreement and reflected in the offer to purchase.

How to Pay Your Buyer’s Agent

If you’re concerned about covering your buyer’s agent’s fee, here are 3 options to consider:

1. Direct Payment: Pay the agent’s fee from your cash reserves.

2. Adjust Your Down Payment: Use a portion of your down payment to cover the fee. For instance, instead of a 10% down payment, put down 7% and use the remaining 3% for the agent’s fee. Note that this could increase the cost of mortgage insurance)

3. Include in Sales Price: Add the agent’s fee to the sales price and request that the seller covers it. Ensure that the appraisal supports this higher sales price.

Should Sellers Pay the Buyer’s Agent?

Traditionally, sellers have compensated both the selling agent and the buyer’s agent from the proceeds of the home sale. With the new rules, here’s why considering this option might still benefit you:

• Increased Offer Attraction: Buyers may be more inclined to make offers if they don’t need to cover the agent’s fee themselves.

• Higher Asking Price: You can increase your asking price to cover the agent’s fee, provided the market supports this value.

• Enhanced Sale Process: Buyer-side agents will help sell your home by scheduling tours with qualified home shoppers.

• Avoid Dual Agency: You will avoid the need for dual agency, where your agent must represent both you and the buyer rather than focusing on your best deal.

Negotiating buyer’s agent compensation can ultimately help you achieve your goal of selling your home at the price you need.

Need More Information?

Understanding these changes can help you make informed decisions in your real estate journey. If you have questions or need further assistance, feel free to reach out. The Greenway Team is here to help!

 

For many would-be homebuyers and sellers, 2024 has been a waiting game.

Overall, both groups are looking for lower interest rates. And while mortgage rates have fallen from their recent highs, they are still dampening affordability for buyers and keeping current owners locked in.  

There's more to the market than meets the eye. We're still helping homeowners and homebuyers every day. And if you need us, we're here to help you too.

Here's our take on where things stand today:

• Homeowners with a mortgage loan have an estimated $16.9 trillion in home equity.* Values are still rising this year, though at a slower pace.
• At their June meeting, the Federal Reserve Board projected two policy rate cuts still to come in 2024. Mortgage rates can fall in anticipation of future Fed action.
• The number of homes for sale hit its highest seasonally adjusted level since mid-2020* More competition can help to keep prices in check.
• The recently released Consumer Price Index shows inflation continuing to cool. Slowing inflation can be good for rates and overall affordability.

Our role in today's environment is to find ways to help our clients move forward, even if the market feels stuck. We help our clients get cash from their equity, access helpful programs, lower their interest rates, and more. 

Let us know how we can help you! 888.616.9885

*June 2024 ICE Mortgage Monitor