Until recently the question of whether a 30 year mortgage option could survive the reduction or elimination of government backing has been mostly speculative. However, the new administration has made it clear they support the private market assuming more risk and the government assuming less. What will this mean? Among other things, it could mean the liquidation of Fannie Mae, Freddie Mac, and decrease the number of loans eligible for FHA backing. Without government backing, “riskier” borrowers, those with a higher potential to default on loans, may find it increasingly difficult to get a 30 year mortgage, while borrowers with good credit will shoulder the affects of increased risk through higher premiums.
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