Young buyers: Report: More millennial households own than rent. Prices still high: These are the 10 housing markets across the US where home sellers are sitting pretty “We're going to have to see it in practice and see how it plays out but overall, the thought process is probably sound and good,” he said. ![]() “Are there going to be people who qualify for a loan but maybe shouldn’t? Maybe, but that’s probably a very small percentage," he said, adding,"But I can see at the end of the day, money is money and if you have great credit, why should you be penalized? “I can see both sides,” said Hakan Wildcat, mortgage area manager in Kansas for Guardian Mortgage. It depends on which side of the spectrum you land. Housing's future: How Hispanic homeownership became a 'driving force' shaping the housing market's future. High home prices: Home prices rose in February after months of decline as low inventory met high demand Groups that benefit from that change include low- to median-income first-time homebuyers buyers using the HomeReady (Fannie Mae) or Home Possible (Freddie Mac) low-down-payment mortgage options for low-income buyers buyers using the HFA Advantage (Freddie Mac) or HFA Preferred (Fannie Mae) loans offered through state and local housing finance agencies and single-family loans that fall under the Duty to Serve program that helps low- and moderate-income families finance manufactured housing and rural housing purchases. Last October, Housing Finance Agency eliminated fees for conventional loans for about 20% of homebuyers, which helped boost affordability for many Americans, particularly as housing costs rose. These changes are part of the Federal Housing Finance Agency’s broader examination of fees to provide “equitable and sustainable access to homeownership” and shore up capital at Freddie Mac and Fannie Mae. Wealth builder: Homeowners became 40 times wealthier than renters in the past decade Why are these changes being made? Home loans and interest rates: What affects mortgage interest rates when buying a home? What loans do these fees apply to?Īny loan that’s guaranteed by either Fannie Mae or Freddie Mac, regardless of the lender.įannie Mae's and Freddie Mac’s share of the mortgage market comprised nearly 60% of all new mortgages during the pandemic, up from 42% in 2019, according to the Urban Institute. Low-balled: Thinking of buying a home? Here's why you should offer less than asking. What you need to know: Housing market glossary: 25 real estate-related terms you should know, from FICO to escrow ![]() After that date, you could pay as much as 0.375%. 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. However, the penalty now for having a lower credit score will be smaller than it was before May 1.įor 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. If you have a top credit score, you’ll still pay less than if you have a low credit score. ![]() The entire matrix of fees based on credit score and down payment has been updated. Lucrative work: How to find an internship: These are some of the highest paid opportunities on the market What are the fee changes? How much better?: Exclusive: Save thousands on your home mortgage by raising your credit score this much Scoring higher: Applying for a mortgage? How to improve your credit score and save when buying a house In some cases, people with higher credit scores may end up paying more while those with lower credit scores will pay less. The changes relate to credit scores and downpayment sizes. Starting May 1, upfront fees for loans backed by Fannie Mae and Freddie Mac will be adjusted because of changes in the Loan Level Price Adjustments (LLPAs), the fees that vary from borrower to borrower based on their credit scores, down payments, types of home and more. ![]() If you're looking to buy a home, be aware that mortgages will change next month.
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