Good-credit homebuyers will be forced to pay more for their mortgages to subsidize loans to higher-risk borrowers when a Biden administration rule begins to take effect next month.
A Washington Times report Tuesday sets out the circumstances around the change. It states:
Experts believe that borrowers with a credit score of about 680 would pay around $40 more per month on a $400,000 mortgage under rules from the Federal Housing Finance Agency that go into effect May 1, costs that will help subsidize people with lower credit ratings also looking for a mortgage.
“The changes do not make sense. Penalizing borrowers with larger down payments and credit scores will not go over well,” Ian Wright, a senior loan officer at Bay Equity Home Loans, outlined to the Times. “It overcomplicates things for consumers during a process that can already feel overwhelming with the amount of paperwork, jargon, etc. Confusing the borrower is never a good thing.”
Fox News further states the Federal Housing Finance Agency, which oversees federally backed home mortgage companies Fannie Mae and Freddie Mac, believes the change will give consumers more affordable housing options.
