A rule change related to how America's largest loan guarantors calculate upfront mortgage fees is set to take effect May 1.
Fees on new mortgages will become relatively cheaper for home loans backed by Fannie Mae and Freddie Mac. For borrowers with higher credit scores, the costs are generally increasing.
The updated fee structure means the costs will increase by as much as 0.75% for borrowers with higher credit scores. And for people with lower credit scores, the fees will decrease by as much as 2%.
For example, a buyer with a credit score of 650 putting a 25% down payment on a $400,000 home would now pay 1.5% in fees on the loan, or $4,500. That compares with 2.75%, or $8,250, under the previous fee structure.
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Meanwhile, a borrower with a credit score of 750 who puts down 25% on a $400,000 home would now pay 0.375% in fees, or $1,125, compared with 0.250%, or $750, under the previous fee regime.