Mortages Hit with Higher Risk Fees

The mortgage giants are adding risk fees to more loans extended to people with stellar credit. To avoid a fee or to get a discount, most borrowers will need FICO scores of 740 or better and down payments of 25% or more. For example, a buyer of a $200,000 house who has a 700 FICO credit score and 20% down payment will pay $1,600 for the Fannie risk fee vs. $1,200 before. If the borrower's score is 680, the fee will be $2,800. Borrowers can pay fees upfront, or lenders will price them into interest rates. While not huge, the new fees are notable in that they're being added to more loans to borrowers with higher credit scores. The other expectation is that lenders may want 25-30% down which is going to take a lot of people out of the market.

My advice: Buy now while home prices are really low and before all these changes kick into high gear. Check out home values on my website under Market Snapshot or MLS search. Then call me.