Upcoming Mortgage Changes, May 2023
Despite lots of bad press (some potentially warranted), there are several changes coming to the mortgage industry this May. Starting May 1st, 2023, new changes to mortgage fees are expected to take effect. Here's a summary:
Adverse Market Refinance Fee Removal: The Federal Housing Finance Agency (FHFA) will no longer require lenders to pay the Adverse Market Refinance Fee, which was implemented to offset COVID-19 related losses for Fannie Mae and Freddie Mac.
Increase in Conforming Loan Limits: The maximum loan limits for conforming mortgages, backed by Fannie Mae and Freddie Mac, are expected to increase, allowing borrowers to qualify for larger loans in higher-cost areas.
Changes to FHA Mortgage Insurance Premiums: The Federal Housing Administration (FHA) will adjust its mortgage insurance premiums, which could affect the monthly payments for FHA-insured loans. The exact details of the changes have not been released yet.
Removal of Refinance Loan Level Price Adjustments (LLPAs): Fannie Mae and Freddie Mac will no longer impose Loan Level Price Adjustments (LLPAs) on certain refinanced mortgages, potentially reducing the cost of refinancing for some borrowers.
Potential Changes to VA Funding Fee: The Department of Veterans Affairs (VA) has proposed changes to the VA funding fee structure, which could affect the costs associated with VA-backed home loans. The exact details of the changes have not been finalized yet.
It's important to note that these changes may vary depending on the specific lender and loan program, and borrowers should consult with their mortgage provider for the most up-to-date and accurate information. This is also a summary of proposed (not final) changes, and should not be taken as fact without the consultation of a licensed lending official.
