“Why Mortgage Fees are Changing and How it Will Affect You”

Mortgage fees are a hot topic in the home buying market. They are changing, and people with better credit scores could end up paying more than before.

“We’re getting a lot of calls, not just from consumers, but also from realtors and other industry professionals,” explains Alyssa Caliendo, branch manager for Bay Equity Home Loans.

Caliendo – of Bay Equity Home Loans in West Hartford – is hearing a lot of questions about the rate changes on the new mortgages that will officially go into effect next Monday, May 1st.

These are conventional mortgages backed by Fannie Mae or Freddie Mac.

If you’re in the market for a home, tell us it’s probably too late to avoid a possible rate increase. The current rates offered already include upcoming changes.

“Anyone who has bought a house in the last few months is safe. But those who have not yet will be affected by changes in rates and regulations,” says Caliendo.

What is getting a lot of attention is that the updated rate structure means costs will go up for people with higher credit scores and rates will go down for those with lower credit scores.

The Federal Housing Finance Agency calls it a step toward “equitable and sustainable access to home ownership.”

“I don’t think it’s going to massively disrupt the mortgage market for high-score borrowers. And if it helps a low-score borrower, you know, get into a home, it’s probably not a bad thing,” said David Sacco, an intern at resident business at the University of New Haven.

For example, these would be the changes for someone buying a $400,000 house with a 25% down payment.

According to NBC News, someone with a credit score of 750 would see their payments increase from $750 to $1,125. Another person with a credit score of 650 would see a big drop from $8,250 to $4,500.

Although previous government initiatives have helped cause problems in the property market, Sacco says he doesn’t think that will be the case with this adjustment.

“And a lot of it makes sense, you just have to be careful not to do too much of a good thing,” Sacco said.

Experts point out that there are many factors that influence what you pay for a mortgage. And the increase in interest rates far outweighs the changes in fees.