The Federal Housing Finance Agency (FHFA) recently announced a new Adverse Market Fee that may impact your ability to take advantage of today's historically low rates to refinance your current mortgage. Here’s everything you need to know about this new fee:
WHO IS IMPOSING A FEE? AND HOW MUCH IS IT?
- Fannie Mae and Freddie Mac are adding a 50 basis point fee (0.5% of your loan amount) to all conventional refinance loans. As an example, if your loan amount is $250,000, the fee would be $1,250.
- Fannie Mae & Freddie Mac are projected to lose $6 billion in the wake of COVID-19. Losses are attributed specifically to actions taken to protect renters & borrowers during the pandemic.
WHEN DOES IT TAKE EFFECT?
- The fee was originally announced on August 18th for a start date of September 1st. However, governmental agencies and stakeholders argued that due to the lack of advanced notice, this would affect refinance loans that were already locked and in process.
- As it stands, the final date that the loan must be delivered to Fannie Mae and Freddie Mac by, or incur the fee, is December 1st.
SO, I CAN CLOSE BY DECEMBER 1st WITH NO FEE?
- False! It takes approximately 2 weeks for a loan to be sent over and delivered to Fannie Mae and Freddie Mac after funding.
- This means your loan needs to be fully funded by November 13th. All loans funded after that date will have the fee.
WHEN DOES THAT MEAN I NEED TO START THE REFINANCE PROCESS?
- Now! Homebridge is currently locking in refinance loans with 60-75 day locks. This means that you should lock in your application by September 14th. I can help you understand what you need to provide and what to do to get the ball rolling.
Whether your goal is to save money each month, access cash from your home’s equity, or shorten your loan term, it’s advantageous to investigate refinancing and reach out as soon as possible to discuss your needs.
Similarly, if you know someone who has not refinanced yet, do them a favor and let them know about this current situation, I would be more than happy to discuss with them as well.
CONTACT ME TODAY TO SEE IF REFINANCING MAKES SENSE FOR YOU!
Zach and the Lucy Lending Team