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The Choosi Blog

Rumors Debunked: What You Need to Know About These Mortgage Fee Changes

Updated: May 2, 2023

If you're in the market for a mortgage, you may have heard rumors about upcoming fee changes for mortgages backed by Freddie Mac and Fannie Mae. But what's the truth behind these rumors? Let's take a closer look.



First of all, it's important to note that the changes to mortgage fees are part of a plan to make homeownership more affordable for more people. The Federal Housing Finance Agency, which oversees Freddie and Fannie, is trying to strike a balance between reducing fees for some borrowers while ensuring the safety and soundness of the enterprises by enhancing their ability to improve their capital position over time.


So what do these changes actually mean for borrowers?

In general, the fees will go down for many with lower credit scores and will increase for many with higher credit scores. However, this doesn't mean that people with lower credit scores will pay less than those with higher credit scores. The changes mean that people with higher credit scores will still pay less based on lower risk to the lenders, but having a lower credit score will now come with less of a penalty.


For those with lower credit scores, the fee changes will reduce the penalty for having a low score. For those with higher credit scores, more price tiers have been put in place, which in some cases may increase fees.


However, any loan with less than a 20% down payment must have private mortgage insurance, which means that those who put down less than 20% pose less risk to the government-sponsored enterprises (GSEs) and should pay less in fees to the GSEs.


What are the people saying?

Despite these changes being designed to make homeownership more accessible, some critics have argued that well-qualified buyers are already struggling to enter the housing market.


Why is this happening?

The upcoming fee changes for mortgages backed by Freddie Mac and Fannie Mae are part of a plan to make homeownership more affordable for more people. While the changes may increase fees for some borrowers, they are designed to balance the need to reduce fees for some while ensuring the safety and soundness of the GSEs.


So if you're in the market for a mortgage, don't let rumors scare you off – take the time to understand the changes and how they may affect you.


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