There’s a lot of misinformation out there about new mortgage loan fees and a new mortgage fee structure by Fannie Mae and Freddie Mac that technically goes into effect on May 1st, 2023. The changes to these fees (Loan Level Price Adjustments or LLPA’s) are based on loan features such as a borrower’s credit score and loan-to-value (LTV) ratios. In general, the structure for the new mortgage rules raises fees on borrowers with higher credit quality and lowers the fees for borrowers with lower credit quality. However, for the most part, the actual fee paid is higher for lower quality credit borrowers. For example, based on the new mortgage rules, assuming an 80% LTV and a $300k mortgage loan, a person with a 640 credit score will pay $4,125 more in fees compared to a person with a 740 credit score. I also discuss in today’s video how to improve housing affordability in the US (i.e. make housing more affordable).
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To give you a quick mortgage interest rates update, according to the Mortgage News Daily the average 30yr fixed rate mortgage is around 6.5% for the current mortgage rates (at the time of filming this video for those with excellent credit).
Comment below: what’s your housing market forecast? Do you think a housing crash will happen or are your housing market predictions that the real estate market and home prices will continue to surge?
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*** Jason Walter, CPA (lic 103885) Sacramento real estate agent and native Realty ONE Group Complete (DRE 01923240) [email protected]
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Disclaimer: Jason Walter is not a practicing tax accountant or a licensed attorney or financial adviser. Therefore, the information in these videos shall not be relied upon as tax, legal, or financial advice from a qualified perspective. If you need such advice, please contact a qualified tax accountant, attorney, or financial adviser. We have taken reasonable steps to check that the information in this video is accurate but we cannot represent that it is free from errors. You expressly agree not to rely upon any information contained in this video - it is for entertainment purposes only.
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