Refinancing Your Mortgage In 2020? Watch This First

TL;DR

Fannie Mae and Freddie Mac have announced a new half a percent refinance fee, potentially making it more difficult to take advantage of low interest rates and save money on mortgage refinancing.

Transcript

if you were thinking about refinancing your mortgage to take advantage of these low interest rates to save money well you might want to hurry up because fannie mae and freddie mac announced that they're going to be charging a new half a percent refinance fee and in this video i'm going to be going over what's going on and how you can avoid paying t... Read More

Key Insights

• 🤱 Fannie Mae and Freddie Mac are charging lenders a half a percent fee on mortgage refinances starting September 1st.
• 🤑 The fee is seen by some as a money grab and contradicts the aim of low interest rates to encourage refinancing and saving money on mortgages.
• 👻 Refinancing before September 1st allows borrowers to avoid the extra fee, as banks and lenders may not have plans in place to implement it immediately.
• 😅 Some lenders may eat up the fee to remain competitive, making it beneficial for borrowers to compare prices and shop around.
• 🤱 While the fee is intended as protection against mortgage defaults, banks already have protection through PMI insurance for borrowers with less than 20% equity.

Questions & Answers

Q: Why are Fannie Mae and Freddie Mac charging a new refinance fee?

Fannie Mae and Freddie Mac claim the fee is to protect themselves against potential mortgage defaults in the future. However, some believe it is just a money grab.

Q: How can I avoid paying the new refinance fee?

If you refinance your mortgage before September 1st, you can avoid the fee. Banks and lenders may not be prepared to implement the fee immediately, providing an opportunity to lock in your rates and fees.

Q: Will lenders pass on the fee to borrowers?

Some lenders may choose to absorb the cost to remain competitive, while others may pass it on to borrowers. Shopping around and comparing lenders can help find the best deal.

Q: What other costs should I consider when refinancing?

In addition to the new fee, pay attention to closing costs. Some lenders may try to offset the fee by raising closing costs, so it's important to compare both interest rates and closing costs.

Summary & Key Takeaways

• Mortgage rates are at historically low levels, making it an attractive time to refinance and save money on your mortgage.

• Fannie Mae and Freddie Mac have announced a new half a percent fee on mortgage refinances, which could make refinancing more expensive in the future.

• The fee is scheduled to start on September 1st, but if you refinance before that date, you can avoid paying the additional fee.