Combination lack of housing, the COVID-19 pandemic and historically low interest rates created ideal conditions for homeowners refinance your mortgages in many parts of the United States. And starting from August 1, refi prices can become even more pleasant.
Mortgage giants Fannie Mae and Freddie Mac have said they will remove refinancing fees in an unfavorable market for everyone. refinanced mortgage starting next month. The refinancing fee translates into a 0.5% fee on refinanced loans, or approximately $ 500 for every $ 100,000 borrowed.
The state fee was added to December 2020 to allow Fannie and Freddie to recoup some of the losses that government-funded lenders expected to suffer during the COVID-19 pandemic. In most cases, lenders would pass this commission onto borrowers, who could add thousands of dollars to refinancing. This move was seen as a way to counterbalance the losses to creditors after Care law posted federal ban foreclosures and gave homeowners the opportunity to pause mortgage payments.
While it is not yet clear if the U.S. economy is on a solid footing – bursts of inflation worried some economists – the cancellation of this fee is good news for homeowners looking to get refinancing.
From April to July 2020, when the pandemic was escalating, approximately 5% of Fannie and Freddie’s borrowers were registered in refusal of a mortgage programs. Since then, the figure has dropped to 2%, according to the FHFA. The agency said the success of its COVID-19 policy has lessened the impact of the pandemic on loans to Fannie and Freddie, ensuring that commission payments are stopped as soon as possible so that lenders can transfer savings to borrowers.
“The COVID-19 pandemic has financially exacerbated America’s affordable housing crisis. Removing refinancing fees in an unfavorable market will help families take advantage of the lower rates to save more money, ”said Acting Director of the Federal Housing Finance Agency Sandra L. Thompson in a statement. Press release… FHFA was established after the 2008 housing crisis and the agency acts as conservative mortgages Fannie and Freddie.
Some refinancing loans are already exempt from fees, including homes worth $ 125,000 or less, homes refinanced through Fannie Mae Home Ready or Freddie Mac Home Possible programs, and government-backed mortgages, including FHA, VA as well as USDA loans. Giant mortgages ranging from $ 510,400 to $ 765,000 were also tax exempt in some regions.
Refinancing rates will continue to fall in July, except for 10-year fixed loans. The FHFA said it will continue to monitor the housing finance system and make the necessary adjustments.