Fannie Mae and Freddie Mac Add Surcharge to Mortgages

Fannie Mae and Freddie Mac’s recent announcement shows that the subprime crisis is flowing over into the prime borrower market.

These two government sponsored entities were created to promote homeownership are now adding new surcharges to loans they purchase. These additional fees have sparked an outrage among mortgage brokers and home builders as this will make it harder to qualify borrowers.

The new surcharges are to take effect March of 2008 although many lenders have started charging them now. The current fee break down is for any borrower putting less than 30% down on a mortgage for less than a 620 credit score is 2 points, between 620 and 639 is 1.75 points, between 640 and 659 is 1.25 points, and between 660 and 679 is .75 of a point. As interest rates have been dropping the last few months you can expect this increase to add anywhere from a half of a percent to one and a half percent to your new mortgage.

To read more about mortgage fees rising, even for prime borrowers head on over to CNBC.