Fees for home mortgages increase

USA Today – For the first time since 2009, Fannie Mae and Freddie Mac are raising risk fees charged to lenders on loans they buy for resale to investors. Fannie and Freddie also are adding risk fees to more loans offered to borrowers with exemplary credit. Although lenders could absorb the cost, most are expected to add the fees to loan costs.

MAKING SENSE OF THE STORY

  • To avoid a fee or to receive a discount, most borrowers will need FICO scores of 740 or better and down payments of at least 25 percent.
  • The fee increases likely will affect most loans with terms longer than 15 years that are sent to Freddie beginning March 1, and to Fannie beginning April 1.
  • The most notable aspect of the fee increase is that the fees are being added to more loans to borrowers with higher credit scores. With few exceptions, risk fees previously hadn’t applied to borrowers with FICO scores of 740 or higher. Read the full story

 



Five steps to first-time buyer happiness

Mercury News – The first step in the home-buying process is to find out what you can afford to pay for a house, condo, or co-op. Read the full story

Curbing closing costs

The New York Times – Borrowers have some weapons for keeping closing costs down, the result of recent guidelines requiring lenders to disclose certain fees, but perhaps the most underutilized consumer tool simply involves old-fashioned haggling. Read the full story

Banks boost home-loan relief

The Wall Street Journal – As the federal government’s flagship mortgage-modification program comes under scrutiny for failing to meet its goal of helping three to four million troubled homeowners, state-level efforts to boost modifications appear to be picking up momentum. Read the full story

What you should know about the market

  • An increasing number of state and local governments are now offering “down payment assistance programs,” grants, or low- and no-interest loans to first-time buyers or those who haven’t owned a house in a few years.
  • One such program offered in California is the California Housing Finance Agency’s “School Facility Fee Down Payment Assistance Program.” First-time buyers, or buyers who haven’t owned a property for at least three years, who purchase a newly constructed single-family home or condo can receive a grant for $5,180 on average for down payment, closing costs, or to pay for mortgage costs.
  • Income restrictions on the School Facility Fee Down Payment Assistance Program vary by county, with Santa Clara County being the most generous at up to $12,200 for a family of four.
  • An additional benefit of the School Facility Fee Down Payment Assistance Program is that the grant is forgiven for buyers who remain in the home for at least three years.
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