How Iran Tensions And Oil Prices Move Home Loan Rates

We break down why mortgage rates jump back into the mid-sixes and what global headlines are doing to bonds, oil, and pricing for 30-year fixed loans. Then we share a major Fannie Mae condo approval change that can reopen financing for projects that have been stuck for years. 

• Mortgage rates moving into the mid-sixes for well-qualified borrowers 
• Market volatility tied to Iran conflict, oil prices, Treasuries, and yields 
• Rate buy downs as a path into the lower sixes and why the fives fade for now 
• Fannie Mae condo approvals and the role of a central project database 
• why condo boards and management companies often miss mortgage approval requirements 
• how approvals affect buyers, sellers, and long-term resale value 

If you guys are looking to buy condos, you know who I would reach out to!

Transcript

Welcome And Monday Market Check

SPEAKER_00 0:37

Hey everyone, I am taking place of Angie today, and we are here for your Monday market update with Nikki Erickson. Nikki, how are you? I'm doing great. Good. What do we got going on today?

Major Fannie Mae Condo Shift

Roof Insurance Rule Explained

SPEAKER_01 0:48

Well, happy Monday, everyone. We're seeing some interesting turns in the market as far as interest rates are concerned. This is obviously due to the conflict in Iran right now and how that is affecting oil prices and treasury and yields and all these different factors. So we are solidly into the mid-sixes for well-qualified borrowers for 30-year fixed conventional mortgage rates. We do have opportunity to buy down right now into the more lower sixes, but those fives are temporarily gone right now, unless you really want to spend the money to buy down that interest rate. So it has been a little bit more volatile than what we were expecting it to be, but we're hoping that the ceasefire that has happened will help those bonds kind of calm down a little bit and see some improvement in mortgage interest rates, especially if we can come to a resolution. So we will see how that goes. In the meantime, a huge, huge change to condominium approvals with Fannie Mae. This is extremely important, especially in areas where there are a lot of condos, particularly like, for example, in Phoenix, where I am, there are a ton of associations that are condos instead of townhomes. And there's a huge issue with getting those condominiums approved through Fannie and Freddie. And so to start off with, Fannie has a central database where they keep notes and information on approvals for certain condominium associations throughout the country. So there is a it's like a central reporting database, just like FHA does. The difference being that, you know, when we go to get FannieMe approvals, obviously those are under different circumstances than what FHA does. So their big thing that they announced after years ago when that condominium collapsed in Miami, Fannie Mae changed their rules to how they look at approvals on their end. One of the big changes that they made at the time was requiring that condominium associations carry replacement cost coverage on the roofs, not actual cash value. This is important because replacement cost means that it doesn't matter how old the roof is, the insurance company will allow your insurance claim to replace the entire roof. What had happened since that point is that it became extremely expensive for associations to carry insurance for the association, which means that H we dues went up and it was really wreaking havoc on these approvals. Well, as of March 18th, Fanny May changed their guidance and is now allowing actual cash, cut actual cash value on the roof portion of the coverage only. So they still require you to have full replacement coverage on you know a lot of different apparels like wind and you know damage and you know those types of things. However, for the roof specifically, they are allowing for actual cash value. So this is kind of a huge change because condominium properties that they've that previously weren't able to be approved are going to be able to be approved with Fannie Mae now. Huge change, which is amazing. That's amazing. It is, it is, and it's it's huge for me and my business as well because I can't tell you the number of times and I spoke about this before, but one of the big struggles that we have is getting these condos approved because there's a disconnect between the condo association management company, the board of director, and the board of directors knowing what is required for Fannie Mae approvals versus making decisions on insurance policies that they feel is enough coverage and keeps their costs down. So there's a huge disconnect between the two. And there really isn't a company or a liaison that can help between mortgage approval for the condominium association and the actual association management company. It is extremely important that we have that we bridge those connections because when they're making decisions on insurance, this could disrupt the entire association, et cetera. And there's just a lack of knowledge there. So, like I've said before, and I'll say it a million times, I could it could absolutely have a business surrounding making sure that mortgage approvals for condominium associations can happen and being that liaison between that and the management company. It's important for resale value for anyone who purchases in that in that association. It's important for anyone who's looking to buy in that association. So just an overall big issue, but it's a huge change for Fanny. So I'm actually really excited because as a result of this, I was able to get a deal overturned already. So I'm super happy about it. And yeah, it's gonna be a great change.

SPEAKER_00 5:15

That is awesome.

SPEAKER_01 5:17

So yeah.

SPEAKER_00 5:18

If you guys are looking to buy condos, you know who I would reach out to.

SPEAKER_01 5:21

There you go. Absolutely. So awesome.

SPEAKER_00 5:24

Thank you so much, Nikki, as always. We'll see you guys next time.

SPEAKER_01 5:27

Bye, everyone.

SPEAKER_00 5:28

Bye.