FEES TO INCREASE FOR EVEN "PREMIUM" BORROWERS!
The sub-prime mortgage mess continues to grow tentacles - even for those borrowers previously thought to have "premium" credit. Fees escalate the lower your score between 620 and 680, with down payments loan-to-value ratios of less than 70%.
Further, providers of Mortgage Insurance are also increasing their premiums, to cover what they feel to be elevated risks. Beginning December 1, 2007, MGIC, one of the largest MIP companies in the U.S., raised rates across the board. The heaviest burden will be on those putting less than 3% down, with credit scores of 660 or less. For these borrowers, rates will increase from 0.96 per $100,000 borrowed, to 1.7%. The new annual Mortgage Insurance Premium on a $200,000 mortgage would increase from $1,920 annually, to $3,400.
Here's a quick summary of the rate increases, to be imposed by Fannie Mae and Freddie Mac beginning March, 2008 (although some lenders are already beginning to build in the fees - watch out!)
- An increased fee of 2.00% of the loan amount will be imposed on borrowers with a FICO score below 620.
- For those with a FICO score between 620 and 639, the fee increase will total 1.75%.
- For those with a FICO between 640 and 659, an increase of 1.25% will apply
- A surcharge of 0.75% will apply for those with FICO's between 660 and 679.
Should a borrower decide to roll the increased fees into their mortgage, the added surcharges will increase the borrower's rate between 0.125 and 0.5 percent.
See our summary posting on BlogChicagoHomes.com, and the complete article, by Chicago Tribune Reporter Kenneth R. Harney, in the Sunday, December 9th edition of the Tribune.
DEAN & DEAN'S TEAM CHICAGO