Rising Mortgage Fees

Concerned About Rising Mortgage Fees on May 1st?
Several of our clients have reached out to us about items they have heard in the news.
Some of the headlines are pretty disturbing suggesting that some buyers are going to be charged more starting May 1st and other buyers will be charged less.
Well, in a nut shell, this is true. The fees charged by Fannie Mae and Freddie Mac (known as Loan-Level Price Adjustments) have been around since 2008 but
on May 1st, they are changing.
Compared to the current fee structure, higher credit score buyers will pay a larger fee and lower credit score buyers will pay a smaller fee. This is not to say
that lower credit score buyers will pay less than higher credit score buyers; but the gap between the two will be reduced.
For example, a buyer putting 20% down with a credit score of 640 will have a Loan Level Price Adjustment of 2.5%;
while the same down payment with a 740 credit score would have a Loan Level Price Adjustment of only be 1%.
So higher credit score buyers still will pay less…but the gap is reduced.
The stated purpose of these changes by the Federal Housing Finance Agency is to help provide “equitable and sustainable access to homeownership”
At Legacy, we want to help you find the lowest cost solutions to your home buying challenges.
Contact a Legacy Professional today to see how we can save you money.