Freddie Mac Increasing fees
While this is not directly affecting VA Mortgage Loans, Veterans should be aware of this as not all veterans choose to use the VA Mortgage Loan Program.
Freddie Mac, the mortgage-finance company under U.S. control, will boost fees it charges lenders selling it riskier home loans.
The changes, which take effect March 1, will raise some of the upfront fees by as much 0.75 percent of loan balances and add costs for consumers using additional home loans as part of their borrowing, the McLean, Va.,-based company said Monday in a memo posted on its website.
“The changes help to ensure that we are adequately compensated for the continued provision of essential liquidity to the mortgage market, and are able to continue our support for affordable lending while being diligent stewards of taxpayer funding,” said Patricia McClung, vice president of offerings management at Freddie Mac.
The increased fees may add to challenges for the housing market by raising borrowing costs.
Lenders could offset an upfront fee of 0.25 percent by raising the rate on a 30-year loan by 0.05 percentage point, causing a rise of about $10 in the monthly payments on a $200,000 loan, the company said.
The new fees included a 0.25 percent charge for borrowers with credit scores of more than 740 and loan-to-value ratios of greater than 75 percent, according to the memo.
Charges for borrowers with scores below 660 rose to as much as 3.25 percent.
Powered by FireStats