Mortgage Fees Rise for Homebuyers With Good Credit Scores Under Biden Plan

Mortgages are a popular way to finance the purchase of a home, but they often come with a variety of fees that can add up quickly. Recently, there’s been talk of new legislation that would increase these fees for homebuyers with good credit scores. Here’s what you need to know:

Under the Biden administration’s budget proposal, Fannie Mae and Freddie Mac would charge a 0.5% “adverse market fee” to lenders who sell loans to the two mortgage giants. Lenders would likely pass the cost on to borrowers in the form of higher mortgage rates or increased closing costs. This has the potential to disproportionately impact borrowers with good credit scores and large down payments since they are typically considered less risky by lenders.

While the fee would apply to all mortgages purchased by Fannie and Freddie, it would have a bigger impact on those with higher loan amounts. However, the proposal has received pushback from industry groups who say it would harm the housing market’s recovery during the pandemic.

The proposal is not final and still needs to be approved by Congress, but it’s important for prospective homebuyers to keep this potential change in mind. It’s always a good idea to research all of the costs associated with obtaining a mortgage so that you can make informed decisions about financing your new home.

In conclusion, the proposed increase in mortgage fees for homebuyers with good credit scores is an important development that everyone should be aware of when considering homeownership. It’s crucial to consider all of the potential expenses associated with buying a home so that you can budget accordingly and make an informed decision about financing your purchase.