Higher mortgage fees for those with good credit? Not so fast
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The news is awash with articles on The Federal Housing Finance Agency’s new loan-level price adjustment (LLPA) matrix all discussing how those with higher credit scores will now pay more in LLPA fees compared to their counterparts with lower credit scores. Some articles even claim the fee increases will amount to borrowers paying hundreds of dollars more per month.
While these assertions may grab headlines, wallets and eyeballs, the fee pricing matrix is a bit more… well, like a roulette table. Depending on how one cherry-picks the data, the losers can quickly go from winners to losers, or vice versa. In other words, whether one pays more in fees varies dramatically depending on the size of the down payment and the borrower’s credit score.
For example, under the new pricing-matrix all borrowers, regardless of their credit score, will now pay less in fees if their down payment is less than 5%. Moreover, for those borrowers with a credit score of 780 or greater they will either receive a reduction in their fees or have no increase at all.
All borrowers, regardless of their credit score, will now pay less in fees if their