Fannie Mae, Freddie Mac crisis: higher loan rates to come

The crisis that surrounds troubled mortgage giants Fannie Mae and Freddie Mac is about to have a huge effect on getting a home loan. In a time when it is already hard to get a mortgage for a new home, things look set to get tougher as we could be in for higher loan rates.

If you are about to take out a new home loan then you should expect to pay more for your mortgage, as many experts believe that mortgage rate will rise. If you already have a mortgage then you do not need to worry, even if you have one with troubled banks Fannie Mae and Freddie Mac.

The crisis of these two big mortgage lenders could also have an effect on homeowners, as it could lead them to foreclosure. Thousands of homeowners who face an increase in their loan rates will be trying to adjust their finances, in the hope of trying to make the extra payments.

If there was to be an increase in loan rates, then this would not be the ideal solution for a recovery in the housing market. The number of foreclosures has been increasing as potential buyers have been scared away, as they need to put down bigger down payments as well as going through tougher credit checks.

Nancy Trejos, Staff Writer for the Washington Post expects that other forms of loans could go up, such as car and student loans. It seems that the crisis of Fannie Mae and Freddie Mac are going to have long lasting effects, and there seems to be no light at the end of the tunnel.

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