Don't be impacted by upfront fees from secondary market lenders
The Federal Housing Finance Authority (FHFA) began implementing targeted increases to Fannie Mae and Freddie Mac's upfront fees for second home loans and certain high balance loans. These new fees went into effect in April, impacting brokers and financial institutions that sell their loans on the secondary market. At Skowhegan Savings, we pride ourselves innot selling our loans on the secondary marketand keeping loan servicing and support local, so we are not impacted by these increases.
If you're getting your mortgage from an institution or broker who sells their loans on the secondary market, you may be surprised with high upfront fees.
Second-home loans upfront fees increased between 1.125% and 3.875%, tiered by the loan-to-value ratio.
High balance loans, upfront fees increased between 0.25% and 0.75%, also tiered by the loan-to-value ratio.
For example, if you are looking to purchase a second home and need a loan for $280,00, there would be a minimum of $3,150 in additional upfront fees (1.125%) if the mortgage broker plans to sell the loan on the secondary market. If you are on the higher end of the loan-to-value ratio, the upfront fees could be as high as (3.875%) or $10,850 for the same property.