Fannie Mae outlined on Tuesday a new pricing policy aimed at helping the mortgage finance giant gird against increased credit risks and losses from home loans it buys from mortgage lenders, but the changes could end up squeezing out many borrowers.
Fannie Mae will double the fee it charges lenders and brokers to 0.5 percent from 0.25 percent beginning Oct. 1.
That fee will likely be passed onto borrowers, adding a quarter point to their mortgage origination costs, said Steve Hops, president of the residential division of the California Mortgage Bankers Association.
A quarter point increase on a $200,000 loan will cost the borrower an additional $500. Borrowers, however, can opt to take a slightly higher interest rate on their mortgage and avoid paying points.
Fannie Mae also revised its scale for points on loans, depending on the size of the down payment and the borrower's credit score.
These changes will make it more expensive for borrowers who want to refinance to take cash out of their equity, experts said. And borrowers with lower credit scores will find it increasingly more costly to get a loan with smaller down payments.
Associated Press
;)
;)
It is getting harder and harder and more and more expensive to get a mortgage...and people wonder why homes aren't selling. The "regular" Sellers I represent (i.e., not in a "short sale" situation) are all wondering where their equity went. Some were hoping to cash out to downsize and retire. Now, that's not looking as attractive as it used to. I even have a couple that moved out and moved to Georgia only to see the price deteriorate in the two months in took their friend to prepare the house for sale.
On an unrelated topic, how come you're not the Howard County Realtor Idol for the showdown at the MAR Conference? And who is this Shannon Miller character?