Homeowners are looking to refinance their mortgage loans. This comes at a time when individuals are looking to save and put more money in their pockets. Banks are looking to charge homeowners a new 0.5% “adverse market refinance fee.”
Freddie Mac & Fannie Mae states that economic uncertainty and risk management is the reason for the increase. A lot of financial institutions are trying to play it safe while so many individuals are reporting a decrease in income or no income at all. Many businesses are still feeling the affects of COVID-19 while we wait for a vaccine.
This fear is being passed down to consumers who are looking to refinance. With interest rates being at their lowest in history, it’s a no brainer.
Mortgages Bankers Association states that this new adverse refinance fee of 0.5% will take affect September 1st and will cost consumers looking to refinance approximately $1,400.
Mortgage Bankers Association released the following statement about this:
“The additional 0.5% fee on Fannie Mae and Freddie Mac refinance mortgages will raise costs for families trying to make ends meet in these challenging times. In addition, the September 1 effective date means that thousands of borrowers who did not lock in their rates could face unanticipated cost increases just days from closing."
Of course, many people believe this fee won’t have much of an impact on consumers, considering interest rates are the lowest they have ever been. Still, consumers are looking to save as much money as possible, and every percent counts.
We will continue to keep you updated on the effects of the new refinance fee taking effect soon.