When COVID-19 first started impacting the market, the Federal Housing Finance Agency (FHFA) introduced an Adverse Market Refinance Fee. According the FHFA, “the fee was designed to cover losses projected as a result of the COVID-19 pandemic.” However, “The success of FHFA and the Enterprises’ COVID-19 policies reduced the impact of the pandemic and were effective enough to warrant an early conclusion of the Adverse Market Refinance Fee.” This is great news for anyone who is looking to refinance and take advantage of these historically low rates.
Thanks to the FHFA ending this fee, lenders will no longer be required to pay a fee of 50 basis points to Fannie Mae or Freddie Mac. A basis point is 1/100thof percentage point, so 50 basis points is equivalent to .5% of your total loan. It may not sound like a lot, but on a $300,000 loan that comes out to $1500 in potential savings for you. Rates are also still historically low, so those added savings could be huge. “Eliminating the Adverse Market Refinance Fee will help families take advantage of the low-rate environment to save more money,” said Acting Director Sandra L. Thompson.
If you haven’t refinanced before or are curious about how much you could save, please don’t hesitate to contact us! We’d love to help you.