CHICAGO -Last week, Freddie Mac announced that it was expanding the list of mortgage products available through its Web-based Selling System. The GSE is adding 40-year fixed-rate mortgages and more adjustable-rate mortgage products. These enhancements - which were announced at the Mortgage Banker's Association's National Secondary Conference and Expo held here - are scheduled to begin rolling out this summer, Freddie stated.
The 40-year mortgage product line in the Home Possible suite will include a standard 40-year fixed rate mortgage product, a 40-year version of the Freddie 100 no-down payment and a 40-year Alt-97 mortgage. "This is just the beginning of a robust product strategy designed to give lenders a highly flexible array of 40-year product so more customers can better match their home buying ambitions with their financial circumstances," said James Cotton, vice president of mortgage sourcing at Freddie Mac.
According to the firm, a borrower selecting a standard 40-year, no down payment mortgage on a $200 thousand loan would need 3.5% less gross monthly income to qualify at today's rates. In addition, they would benefit from a 4.5% cut in their monthly housing payment, and have 5% more home buying power versus a 30-year version of the same mortgage.
On the ARM side, the GSE said enhancements to its Loan Prospector and the online platform would allow customers to assess, price and deliver 20 additional ARM structures. This includes ARMs with shorter look back periods and five new fully amortizing Libor-indexed ARMs with initial periods of three- to 10-years before adjusting every six months.
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