The cost of borrowing for a home is rising. The Commissioner of Financial Institutions and the Federal National Mortgage Association (FNMA) announced that the maximum interest rate for home loans in December will be 8.52 percent per year.
According to the Department of Financial Institutions website, the new rate is four percentage points higher than the current 4.52 percent market rate for 30-year government bonds. Without the free market bidding system, buyers have less control over securing better rates and must accept the new standard.
Affected individuals are encouraged to consult legal counsel about the potential effects of the Depository Institutions Deregulation and Monetary Control Act of 1980, as well as state usury laws for loans made after March 31, 1980. The interaction of federal and state regulations could create a complex legal situation for both homebuyers and lenders.
For more information on the rate change and its legal implications, borrowers and lenders should check the Department of Financial Institutions’ official announcement.
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