If you need assistance, please call 828-279-0998

  • Major mortgage changes on the horizon

    Tuesday, April 25, 2023   /   by Amy Brown

    Major mortgage changes on the horizon

    Beginning on May 1 big changes are coming to the mortgage market changing the fees acquired when buyers purchase a home. 

    I touched on this in a previous newsletter but here it is! The Federal Housing Finance Agency has decided to perform a broader examination of fees in order to provide "equitable and sustainable access to home ownership". Buyers to benefit will be low to medium income first time homebuyers, buyers using HomeReady or Home Possible low down payment mortgage options, anyone using HFA Advantage or HFA Preferred, and single family loans under Duty to Serve. 

    So what does this all mean? Due to the new loan level price adjustments for any loan backed by Fannie Mae or Freddie Mac, fees will now be on a sliding scale based upon a buyer's credit score and down payment amount.

    For example, if you have a score of 659 and are borrowing 75% of the home's value, you'll pay a fee equal to 1.5% of the loan balance.  Before these changes, you would have paid a 2.75% fee.  On a hypothetical $300,000 loan, that's a difference of $3,750 in closing costs. 

    On the other end, if you have a credit score of 740 or higher, you would have paid a 0.25% fee on a loan for 75% of your home value before May 1. After that date, you could pay as much as 0.375%. 

    A second fee adjustment is due to commence on August 1 for borrowers with a 40% debt-to-income ratio and 60% loan-to-value ratio calculated based upon the value of their home. The exact fee has not been decided upon yet.

    This is great news for buyers in the middle income bracket as you will now be paying lower closing costs. The affect for higher end borrowers in actuality will be fairly negligible.

    Here are today's mortgage rates:

    ? -0.039
    30-Day Range:
    30-YR. JUMBO
    ? -0.014
    30-Day Range:
    30-YR. FHA
    ? -0.015
    30-Day Range:
    30-YR. VA
    ? -0.083
    30-Day Range:
    30-YR. USDA
    ? -0.025
    30-Day Range:
    ? -0.106
    30-Day Range:
    Call me and let's get the process started!