New mortgage loan fees in line for home and condo buyers
Jan 2011 07

Things aren’t going to get any easier for those looking to buy a home in 2011. But, with a fair amount of patience, you can still buy the home of your dreams.

Coming in 2011 is a new set of rules and regulations by mortgage giant Fannie Mae. With its goal of reducing the risk of guaranteeing loans made by member banks, Fannie Mae is hoping to increase incoming revenue at the same time. The new regulations will bring a whole nest of new fees with them, in line with what fellow investor Freddie Mac has already instituted.

According to Kenneth R Harney, quoted in The Real Deal:

Say you want to buy a house that requires a $300,000 first mortgage. You have impressive FICO scores — above 800 — and cash for a down payment just under 25 percent.

Purely on the basis of your credit score and loan-to-value (LTV) ratio, Fannie now plans to charge an extra quarter of a percentage point of the loan amount [an additional $750] to do the deal …

[But] say your FICO score is 679, and you have down-payment money just under 20 percent, Fannie will soon begin hitting you for 2 3/4 percent in add-on fees — a staggering $8,250 … up by $1,500.

Condo buyers will have additional fees to pay. Read the entire article to learn more.

In the scheme of things, costs such as these get lost in the minutia. When people buy a half-million dollar condo, that’s the number they focus on, not the money they have to put up in closing costs.

Well, at least that’s what it used to be like. If you’re going to be hit with $10,000 in fees, suddenly you might care a little more.

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