ATLANTA — Changes that began May 1st could impact how much you pay to borrow money for a home, but are the changes punishing borrowers with good credit?
Build a good credit score and typically you’ll find it easier and cheaper to get a loan.
Several 11Alive viewers emailed us asking if new policies enacted by the Biden Administration are resulting in higher fees for home buyers with good credit.
Question
Will fees now be higher for homebuyers with good credit scores?
Sources
Answer
Yes, fees will be slightly higher for some homebuyers with good credit scores, but it will still cost them less than borrowers with lower scores in the long run.
What we found
The change that took effect May 1 involves fees that impact your mortgage interest rate. Factors include the size of your down payment and your credit score.
However, the change will not impact anyone who borrowed money prior to May 1.
The Federal Housing Finance Agency changed the way those fees are calculated for loans backed by Fannie Mae and Freddie Mac, two companies that guarantee home mortgages in the U.S.
Ganduri said, it’s true, fees will increase for many with good credit and drop for many with lower credit scores -- but it won’t impact all home buyers.
“I want to say that a majority of the homeowners in the U.S. will be impacted by this because most of the loans are in some ways guaranteed by Fannie and Freddie,” said Ganduri.
The National Association of Realtors said there have been multiple changes to the fees since they began in 2008.
Meanwhile, the Federal Housing Finance Agency explained one of the goals is to support lower income borrowers.
“They will provide reliable liquidity to the market while also providing more targeted support for creditworthy borrowers limited by income or wealth,” the Federal Housing Finance Agency said of the changes in a statement.
Ganduri said that despite the changes, it’s still better to keep your score high.
“You will end up paying lower cost when you’re trying to finance your mortgage,” he said. “It’s just that you aren’t going to be paying as low as you were.”