When it rains, it pours. Is that the saying? Well, I did not want to wait any longer to share this info. If you were waiting to lock in until you found the perfect home, you may want to consider reversing your plan. Lock in this week and then look until you find the home you want. Here’s why…
Daily Real Estate News | February 18, 2009 | Share
Fannie and Freddie Plan Big Fee Increases
Fannie Mae and Freddie Mac are both toughening their credit score and down-payment rules as of April 1.
In response, major lenders are already factoring in the higher fees, which reduces the effectiveness of the stimulus efforts.
Under the new guidelines, buyers with down payments of less than 25 percent will be charged a three-quarter point add-on penalty, no matter how high their credit score.
Buyers of duplexes, where one unit is owner-occupied and the other is rented, will be charged a 1 percent add-on.
Refinancers who take cash out will be charged as much as three points if they have a low to moderate equity stake.
Freddie spokesman Brad German says the loan categories and credit risk combinations targeted by these fees “default at four to eight times” the rate of other mortgages backed by Freddie. “We have to manage these risks appropriately,” he says.
Source: Washington Writers Group, Kenneth R. Harney (02/15/2009)
