Are Higher Credit Scores Being Punished? The Mortgage Fee Policy That’s Sparking Debate



As you dive into the world of homebuying, it’s crucial to understand how these new fees will impact your mortgage application process and overall financial planning.

We will explain the rationale behind the FHFA’s mortgage fee adjustments and explore the potential consequences for homebuyers and the broader housing market.

What is Happening?

The Federal Housing Finance Agency (FHFA) intends to promote equity and enhance first-time homebuyers’ and minorities’ access to housing by increasing fees for borrowers with higher credit scores and decreasing them for those with lower scores.

Diving Into The New Fees

Under the new fee structure, Alice, with a 20% down payment, will be charged an LLPA of 1.5% (since her credit score is 680). This means she will pay $3,600 in fees on her loan amount of $240,000 ($240,000 * 1.5%).

What One Expert Believes

Schiff wryly advised those with good credit scores, saying, “Just miss a few payments, screw up your credit score. That will help your mortgage rate.” 

How New Homebuyers Are Affected

The impact on affordability will be felt differently by borrowers depending on their credit scores, down payments, and other factors.

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