Your mortgage fees are going up if you have GOOD credit.

Okay, let's talk about that new mortgage policy from the federal government that basically subsidizes the fees for homebuyers with bad credit scores by increasing the fees on homebuyers with good credit scores. Now, I have all the facts about this big change in this video, so if you're actually interested in this topic to fully understand what's going on, you are going to want to watch this whole video maybe even more than once because I am packing a ton of information in here. And just like everything with the federal government, it's complicated. But I'm going to simplify it as much as I can. First, let's talk about who this does not affect. This policy change in loan fees from the Federal Housing Finance Agency does not impact anyone that has an existing mortgage. If you have a mortgage right now, this doesn't apply to you. This also does not apply to you if you are getting a mortgage from a company other than Fannie Mae or Freddie Mac. If you're getting a mortgage somewhere else, this also doesn't apply to you. But the reality is, Freddie and Fannie loans are usually the most inexpensive, so lots of people do use them. Second, these are not new fees. These upfront fees have always existed. This new policy change just increases those fees for some buyers and decreases those fees for others. The federal government said these changes go hand in hand with its policy to promote sustainable and equitable access to affordable housing, especially for certain first-time homebuyers, low-income borrowers, and underserved communities. These loan level price adjustments, or LLPAs, are generally based on your credit score and how much of a down payment you are bringing to the table. What's changing as of May 1st is which buyers pay which fees. I spoke with a mortgage expert who's been in this business for more than 35 years about what it actually means. Assuming it's a small down payment, 10, 15, 20 percent, and assuming that you have that credit score of 660 or less, you're getting a better deal than that person with the good credit score and a larger down payment. Yeah, you heard that correctly. Buyers who would previously be considered risky with generally lower credit scores and less money down will see cheaper fees than they saw before, and those with generally higher credit scores and anywhere between 10 to 20 percent down will see higher fees than before. How much higher? How much lower? Could be hundreds, could be thousands, depending on several things. Check out this chart. If you have a credit score below 679 and less money in a down payment, generally you're going to see cheaper fees. That's why it's green. But let's take an extreme case. Someone with a credit score less than 639 putting down three percent. In the past, that person would be considered a risky buyer, and your LLPA fee was three and a half percent. But after May 1st, your LLPA fee is 1.75 percent. That's a reduction of one and three quarters percent. You can see it right there. Also, you're going to benefit if you have a higher credit score and ironically enough, you put less money down anywhere between three and five percent. All that green, you're going to see cheaper fees. But the problem right here is in the middle. Those with credit scores between 680 and 779 who put down between 10 and 20 percent, they will generally see an increase in fees anywhere between 0.13 percent and three quarters of a percent. And depending on the size of your loan, that amount could mean hundreds of dollars more or thousands of dollars in extra fees up front. So what should you do if you're in that category? If you can raise your score into the next bucket, the buckets are, you know, 780, 760, 740, 720, 700, etc. So if you can get yourself up to that next bucket, it means cheaper pricing for you or better pricing, especially in this situation where you can, if you can get above 760, you're just going to have to suck it up because there's nothing that you can really do about it. You don't want to tank your credit because it's going to cause you all kinds of other issues in life if you, for credit cards and car loans. So just don't do that. And if you're in that lower credit score category, Jeff suggests you should lock in these new rates, but only if you're ready. As long as your life is relatively stable and you can rely on somebody to back you up, that is the key to survival and success in homeownership. And if it means waiting six months or a year to, to, to regroup and get sort of, you know, financially fitness ready, then wait, because in the long run, you're going to be better off. You don't want to have a foreclosure or something on your hands. Oh no, God forbid. No. Look, if you're really serious about buying a home, you need to find a lender that you can trust and talk to him or her about your own personal situation and what's going to fit best for you and your family. Now, if you want to see those LLPA charts from prior to May 1st and after May 1st, I'm going to send them out tonight in my news girl news roundup email.