It used to be that a good credit score would score you the cheapest mortgage but the Biden administration is about to turn that on its head. A new rule from the Federal Housing Finance Agency will force the borrowers with the best credit scores to pay more in order to subsidize borrowers with lower credit scores.
Anyone trying to secure a new loan or refinance a home after May 1 will be hit with these fees. According to The Washington Times, the fees will break down thusly:
Mortgage industry specialists say homebuyers with credit scores of 680 or higher will pay, for example, about $40 per month more on a home loan of $400,000. Homebuyers who make down payments of 15% to 20% will get socked with the largest fees.”
Meanwhile, borrowers who are less financially fit will qualify for better mortgages with lower down payments, lower interest rates and fewer fees. It is interesting that the federal government can only afford to do this for riskier borrowers by charging it to financially fit borrowers.
