WASHINGTON. The cost of refinancing government-backed mortgages is likely to fall as mortgage giants Fannie Mae and Freddie Mac intend to cut fees imposed last year in the midst of the Covid-19 pandemic.
The Federal Housing Regulator said Friday that Fannie and Freddie will eliminate 0.5% commission for mortgage refinancing Beginning August 1, the Mortgage Bankers Association estimates that the levy, introduced last December, added about $ 1,400 to the cost of refinancing the average mortgage loan secured by firms.
“The Covid-19 pandemic has financially exacerbated America’s affordable housing crisis,” said Sandra L. Thompson, acting director of the Federal Housing Finance Agency. Elimination [fee] will help families take advantage of the low-wage environment to save more money. “
Greg McBride, chief financial analyst at personal finance firm Bankrate.com, said the commission increased the average mortgage rate by about one-eighth of a percentage point, or about $ 20 a month for a $ 300,000 loan. “How many of these will go back into the pockets of consumers will likely depend on how many homeowners buy from different lenders,” he added.
Fannie and Freddie encourage low borrowing costs by buying a variety of mortgages from lenders and subsequently guaranteeing them. The fee was intended to cover potential losses associated with the pandemic and government measures to mitigate its economic impact, including a program that allowed some borrowers to suspend monthly payments.