Why some homebuyers with good credit could soon face higher mortgage fees

ORLANDO, Fla. — Starting next week, some homebuyers with good credit scores could face higher mortgage fees.

A new federal rule will overhaul the loan-level price adjustment, which means monthly mortgage payments for buyers with good credit scores could rise by over $60 a month, while riskier borrowers will have their fees reduced.

>>> STREAM CHANNEL 9 EYEWITNESS NEWS LIVE <<<

Experts Channel 9 spoke with said the idea is to make it easier for more people to become homeowners. which they agree is good. But some wonder if penalizing others is the right way to achieve that.

The changes made by the Federal Fair Housing Finance Agency will reduce the fees for those with lower credit scores and less money to put down and ultimately lower their mortgage interest rate.

Read: Average long-term US mortgage rate drops a 5th straight week

The idea is to make it so more people can afford a home, but real estate agent Ray Lopez there is a downside.

" When we do the right thing and do everything we’re supposed to do… unfortunately we’re getting penalized,” he said.

Lopez said the new structure will actually force those with good credit and a larger down payment to pay higher fees to subsidize the other borrowers, which is something he’s never seen in before.

Read: Here’s what caused Florida’s surge in gas prices

“So there’s going to be a lot of people in shock come May 1st,” Lopez said.

As an example, Andrew Yoerger, the Orlando area manager for Bank of England Mortgage, said someone with a 700-credit score, $400,000 loan with between 15 and 19.99% down will pay about $50 more each month than they would under the current loan-level pricing adjustments.

“Some of these buyers can now afford these houses, which I think is great. But I hate that it comes at the cost of somebody else,” Yoerger said.

Read: Top real estate deals: Here’s what sold for $65M and more

Home buyers with a credit score of 680 and above and who are putting between 15 and 20 percent down are expected to see the biggest fee increases.

Click here to download the free WFTV news and weather apps, click here to download the WFTV Now app for your smart TV and click here to stream Channel 9 Eyewitness News live.

©2023 Cox Media Group