New Freddie Mac and Fannie Mae Guidlines

It will be harder to Get into a Property

The Washington Post has a good article on the changes taking place that will make owning a home harder and more expensive than before the crisis. If your FICO is less than 680 you will find it more expensive and harder to qualify.

According to the Washington Post: "Fannie Mae and Freddie Mac are imposing significant increases in fees for a range of borrowers with down payments of less than 30 percent who formerly were treated as "prime" credit applicants. At the same time, the two largest private mortgage insurers -- MGIC and PMI Group -- are raising premiums on consumers who have low down payments and scores in the mid- to upper 600s on the FICO scale developed by Fair Isaac Corp. The added costs for some home buyers could total thousands of dollars, either at settlement or in the form of higher interest rates. "

Here's a quick overview of the new policies from Fannie and Freddie affecting loan applications in which the down payment amount is less than 30 percent: If the borrower's credit score is less than 620, a new 2 percent fee will be imposed. If the score is between 620 and 639, the surcharge will be 1 3/4 percent. If it is between 640 and 659, the add-on will be 1 1/4 percent. On scores between 660 and 679, the surcharge will be three-fourths of a percent.

Thanks for Reading

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