Good Credit Makes Mortgage More Expensive

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   GA Andersonposted 16 months ago

   "Borrowers With High Credit Scores Penalized Under New Federal Mortgage Fee Plan" Reason.com
   
   "Under the new rules, high-credit buyers with scores ranging from 680 to above 780 will see a spike in their mortgage costs – with applicants who place 15% to 20% down payment experiencing the biggest increase in fees…. [aka the safest loans]
   
   LLPAs are upfront fees based on factors such as a borrower's credit score and the size of their down payment. The fees are typically converted into percentage points that alter the buyer's mortgage rate.
   
   Under the revised LLPA pricing structure, a home buyer with a 740 FICO credit score and a 15% to 20% down payment will face a 1% surcharge – an increase of 0.750% compared to the old fee of just 0.250%…."
   
   Democrat liberals are nuts.  The 'evolved and enlightened' folks that support this kind of 'social justice' are nuts. Reality is real, and they think they know better.
   
   For the red meat: Live your life responsibly and the government, striving for social justice standards, will make you pay more to buy your house.
   
   Penalize the responsible achievers and reward the lesser achievers. Tell folks a biological fact of sex is more of a fuzzy interpretation than a fact and then insist your reality is the real one (but we just haven't gotten there yet)
   
   You alienated strong conservatives with core value assaults and now you're going to alienate the financial conservatives with this upside-down plan.
   
   You guys are nuts. However, I may be misunderstanding something about this new mortgage fee idea. What defense is there for this action?
   
   GA

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      wildernessposted 16 months agoin reply to this

      As always, the defense is that all people should be treated equally, not according to their ability.  Merit is not a part of the package, except that those with higher merit shall give to those that fail to support themselves - that have a low merit.

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         gmwilliamsposted 16 months agoin reply to this

         Wilderness, I am in FULL AGREEMENT with your synopsis.   Each tub should sit on its own bottom.   America has become more parasitic.  Why should industrious people support those who are irresponsible?   That's satanic to say the least.

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      Kathleen Cochranposted 16 months agoin reply to this

      https://www.mortgagenewsdaily.com/marke … --Xtp-ah14
      
      "Fannie and Freddie technically have a "mission" to promote affordable home ownership. Here is the statement on the topic by their regulator, the FHFA: FHFA Announces Updates to the Enterprises’ Single-Family Pricing Framework."
      
      Don't worry. You're not actually paying anything to help poor people - Heaven forbid.

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         wildernessposted 16 months agoin reply to this

         Of course you're not paying any more - only 1/2% of the mortgage.  That's all.

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         1. 72

            Ken Burgessposted 16 months agoin reply to this

            Actually from some calculations I saw, a mortgage on a home that sells for $350,000 would have cost the purchaser with good credit $1,750 a month.  With this new policy in place it would cost them well over $2,500 a month.
            
            I haven't verified this yet to be certain, but it is on my 'to do' list.

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      2. 82

         gmwilliamsposted 16 months agoin reply to this

         Why should housing become "affordable"?  If you can't pay, don't buy.   Live that way other poor people have lived for centuries.  You can't have your cake & eat it too. If you are poor, you have to do without- that is a part of life. No one owes you anything.

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         1. 72

            Ken Burgessposted 16 months agoin reply to this

            I would prefer clarification to just how costly this will be to those who worked hard to pay their bills and build up their credit score.
            
            In the past, it was the government using taxpayer money to help out those who otherwise couldn't afford it.  It seems today using taxpayer dollars for that noble effort is not enough, now others are going to be forced to carry the load, for the misfortune of trying to make their own lives better, and having the means to do so.
            
            
            Under the new mortgage financing rules, homebuyers with riskier credit ratings and lower down payments will qualify for better mortgage rates and discounted fees.
            
            Federal Housing Finance Agency Director Sandra Thompson, a Biden appointee, said the fee changes will “increase pricing support for purchase borrowers limited by income or by wealth.” The agency calls the overall fee changes “minimal” and said the moves will ensure market stability.
            
            
            About $3,200. That’s how much more a borrower in the most-affected qualifying group buying a new home at the average U.S. sale price of $516,500 will pay under the new FHFA rules. These borrowers with credit scores between 720 and 759 taking out a mortgage for between 80% and 85% of the home’s value will pay a 75-basis-point higher fee. 
            
            Of course, I do not trust this Administration or their calculations, anymore than I trusted this type of "selling the product" when they said we would be able to keep our Doctors AND save money when they passed the Affordable Care Act.
            
            For those who have not had the pleasure of using the Affordable Care Act, for working class... Middle of the Road... Americans, it is neither more affordable nor does it guarantee you can use the same Doctor.

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         GA Andersonposted 16 months agoin reply to this

         Your Tsk, Tsk, is misplaced. And 'don't worry' sounded a bit condescending, but I probably misread your message.
         
         Before you had that thought, before where the money would go (ie. the mission statement), comes into play, did you consider the concept first: penalize financially responsible folks (achievers) for being financially responsible?
         
         I would guess that if the extra 'non-penalty' fee was going to hedge fund managers you would not support it. If so, then you're only fine with it because you like where the 'takings' are going. That's not a very big hill to be so haughty from.
         
         GA

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      gmwilliamsposted 16 months agoin reply to this

      Yes, the Democrats are insane, what's new.

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2. 75

   Kathleen Cochranposted 16 months ago

   gmwilliams: Take it up with Freddie and Fannie. Just sharing information here.

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3. 86

   Sharlee01posted 16 months ago

   As a rule, the more wealthy individuals may choose to go to banks for home loans instead of taking out loans from the Federal Housing Finance Agency (FHFA).
   
   Wealthier individuals have more options available to them when it comes to obtaining a mortgage from banks.  Due to more likely having a higher credit score and a larger down payment, which could make them more attractive to traditional lenders like banks. Bank lenders may also be more willing to offer more flexible loan terms and larger loan amounts to high-net-worth borrowers.
   
   It's common for individuals and businesses to seek loans from banks in order to obtain better rates and more favorable loan conditions. Banks have access to significant amounts of capital, which they can lend to borrowers in the form of loans, and they can offer a range of loan products to meet the specific needs of their customers.
   
   However, now due to Bidens' new brainstorm the FHFA  will now offer loans, which are backed by the federal government to persons that have a  proven history of being POOR CREDIT RISKS, with little to no down payments.
   
   Ultimately, the decision of whether to go to a bank or to seek an FHFA loan will still depend on an individual's specific financial situation and goals to obtain better loan conditions and better rates.   Does it make sense a wealthier home buyer would turn to a loan that cost them more monthly and an institution that has been known to fail due to the same hair-brain scheme?
   
   The more wealthy have a long history of going to banks for home loans, due to competition to obtain their business.
   
   So, In my view, with this new Biden grift, we will see more people that truly can't afford homes taking the government up on the offer, as they did in 2007.  It stands to common sense that ultimately this new rule will end up with an increase in home foreclosures. need I use the words "Government bailout".
   
   It is clear this is another poor decision made by the Biden administration. His pie-in-the-sky thought that his new "let the rich pay for the poor" has all kinds of holes. The rich go to banks for loans. The poor go to the government.  It stands to common sense, the government will make little to no money on this crazy scheme. I might add, Biden makes problems and then ignores them when they flop.   "Was'nt me"

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      wildernessposted 16 months agoin reply to this

      You are absolutely correct right down the line.  There will be more foreclosures (an obvious conclusion when sub-par loans are made to those that cannot afford them).  It may or may not lead to a repeat of the 2008 recession, but it absolutely will result in the taxpayer being responsible...for zero return.  That seems to be one of Biden's things - "Give me your money; I will return nothing but grief".

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      1. 86

         Sharlee01posted 16 months agoin reply to this

         We are headed for disaster, in my view, and we will all have a front seat to watching this house of cards collapse.
         
         PERSONAL FINANCE
         Credit card debt is at an all-time high, putting households near ‘breaking point,’ study shows
         https://www.lendingtree.com/credit-card … tatistics/
         PUBLISHED THU, MAR 9 20239:26 AM UPDATED FRI,
         MAR 10 2023
         And we are at an all time high of citizens unable to pay their credit cards.
         https://www.npr.org/2023/01/11/11481225 … y%20month.
         
         This very much represents problems.
         
         Citizens are buying and charging for things they can't pay for.
         
         Plus, many industries are now starting to lay off. Especially the Tech industries.
         
         We have sot ourselves in the foot and are bleeding all over the place.

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         1. 94

            wildernessposted 16 months agoin reply to this

            *shrug*  It is the liberal way, championed by Biden.  Spend until there is no more, then raise taxes and give it all away.

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