I want to share some information to buyers out there and homeowners that are trying to refinance about a new law that Fannie Mae and Freddie Mac government issued loans have just instituted. Starting September 1st on refinances, they are going to be charging a 50 basis points, which is basically 50% fee that would be 50% of your loan amount or your refinance amount is going to be charged as an additional fee. Well, let’s put that into some money. So if you were refinancing say a hundred thousand dollars of your home loan, that would equate to 500 additional dollars on your closing cost. Conversely, if you have a $200,000 refinance, that’s now going to be an a thousand dollar additional fee on your closing cost. And so it goes, 300,000 will be a 1,500 additional fee on your closing cost.
When you go to refinance a house, you have to take in what your closing fees are going to be. So let’s just say it’s $1,200, it’s going to be more than that, but let’s just say it is 1,200. Divide that out over how many months is it going to take to eat up those fees in your savings of refinancing? So you kind of have to look at the bigger picture here. Is it worth refinancing? The thought is from the Mortgage Brokers Association is this is a very unfair fee that’s being charged and is going to hurt homeowners that are trying to reduce their cost. So by reducing their cost, they’re adding to their cost. So it just washes itself out.
So you need to be locked in before September 1st on your refinance if that’s what you’re going to do with those type of loans. Talk to your lender immediately. Find out what those new rules are and how it’s going to affect you as a homeowner trying to refinance those loans and make sure you don’t get caught up in that new law that’s going into effect September 1st. As I get information, I want to share it out with all of our viewers because information is a powerful thing for everybody, isn’t it?
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