As of September 1, Fannie Mae and Freddie Mac
are adding 0.5% to mortgage refinancing fees (not rates)
The addition of 0.5% to refinancing fees will affect all refinances packaged September 1 or later. If your mortgage is already being processed it is grandfathered and will not be subject to the new fee. The fee is directed at lenders, but will be passed on to customers as an additional 50 basis points to new loans. The fee is not an increase in the mortgage rate but a one-time fee. If your mortgage is $100,000 it adds $500 to the cost, if it is $1 million it adds $5,000.
The change is designed to shield the two entities (Fannie Mae and Freddie Mac) from the increased risk brought on by the coronavirus pandemic.
~ With care and concern,
from all of us at Colman Knight
