On December 1, it’s going to get more expensive to refinance a mortgage.
Fannie Mae and Freddie Mac will start charging a 0.5% fee on refinanced mortgages that the two mortgage giants purchase.
The reason for the fee, known as the “adverse market refinance fee,” is to cover projected COVID-19 losses.
According to the Mortgage Bankers Association, the change will cost the average consumer an additional $1,400 than they would have paid before.
However, those refinancing balances $125,000 or less are exempt from the fee.
Initially, the adverse market refinance fee was to go into effect on September 1, but it has been extended to December 1, 2020. To avoid the additional costs, clients looking to refinance their mortgages should hustle and start the refi process now.