Looking to refinance? You may have read in recent news of a new refinancing fee to be imposed by the Federal Housing Finance Agency (FHFA) In a recent announcement, Fannie Mae and Freddie Mac said this new 0.5% Conventional mortgage refinance fee that was set to start in September, will now be delayed until December 1.
So the good news is homeowners still have a short window of time to avoid the new fee. Homeowners should act quickly and remember that refinance transactions are currently taking longer to fund due to higher volume. We recommend borrowers have their application in process no later than October 15th to avoid the new fee.
Many industry groups and lawmakers were quick to criticize the new fee, stating that its wrong to make refinancing more costly during the COVID-19 pandemic. The new fee would seriously impact borrowers eager to take advantage of historically low mortgage rates. To make matters worse, this fee came without advance notice which posed issues for many homeowners that had refinance transactions already in process.
In their statement, the FHFA defended the fee, saying it’s needed to cover pandemic-related losses for Fannie and Freddie that are projected to reach at least $6 billion. The companies, which have been under the government’s control since the 2008 financial crisis, have pursued several costly actions during the economic slowdown to keep renters and homeowners in their residences, the agency said.
It should be noted that homeowners with loan amounts below $125,000 are exempt from the fee altogether. Please learn more in the video below. Contact Modern Lending today if you need assistance with your refinance.