The Insurance Doctor
  • linkedin
  • Home
  • Services
  • Articles / News
  • About Us
    • Robert Intelisano
  • Testimonials
  • Contact

Major Mortgage Fee Changes Coming!

You are here:Home » Uncategorized » Major Mortgage Fee Changes Coming!
Major Mortgage Fee Changes Coming!

The Federal Reserve Bank is the central bank of the United States and arguably the most powerful financial institution in the world!  The Federal Reserve Board meets every 6 weeks (their next meeting is May 2nd and 3rd) to evaluate and promote the stability of our financial system and minimize economic risks.  Their main goals are to:

  1. Stable Prices
  2. Maximize Employment
  3. Moderate Interest Rates
  4. Manage Inflation

The biggest weapon the Federal Reserve has is to set and manage fixed interest rates, which in turn expand or contract the economy.  The Fed has increased short-term interest rates called “The Federal Funds Rate” 8 times since March of 2022.  It’s easy to forget that the Fed was holding interest rates at close to zero in the first quarter of 2022.

The ripple effects of the rapid interest rate increases are far-reaching!  Some current bank CD rates, fixed annuity rates, car loans, student loans, and mortgage rates have doubled in the past 12 months!  The changes have occurred so quickly that many consumers and advisors have had problems keeping track of what is going on.

That being said, I had heard about upcoming new mortgage pricing model changes in May, so I decided to interview loan expert Sal Tomaselli, President and Founder of Queens-based Professional Mortgage Solutions Inc., to get into specifics to share with my “Financial Wave” readers.  Here is what Sal had to say:

Closing costs are an unavoidable part of the mortgage process. But as of May, some of those costs may change and even increase for some homebuyers and refinancers.  This is due to recent changes made by the Federal Housing Finance Agency to its pricing framework, which will affect the upfront fees that come with conventional mortgages, but not FHA, VA, or USDA loans.

If you are considering a conventional loan for your home purchase or refinance this year, here is what the changes mean for you:  

1) Higher-credit borrowers may see more variance in fees. 

Previously, borrowers with credit scores over 740 saw the same pricing. Now there will be added brackets with varying fees for those with scores between 750 and 759, 760 and 779, and 780 or higher.

2) Lower credit borrowers won’t be penalized as harshly. 

With the old pricing arrangement, borrowers with a score of 639 or lower, paid fees as high as 3.75%. The new structure reduces the maximum fee to 2.875%.

3) Cash-out refinancing may get more expensive.

The highest fee for cash-out refinances was previously 2.125%, but it will now exceed 5% for some borrowers.

4) Buying a multi-unit property might be less expensive. 

The fees for purchasing a two- to four-unit property range from 0.0375% to 0.625% under the new pricing model, whereas previously the fees were 1% across the board.

The new fees can be complex, and they vary based on the size of the loan, your credit score, and your down payment. If you’re curious about the fees you can expect for your upcoming purchase or refinance, don’t hesitate to get in touch.

I was also pleasantly surprised to learn that Sal’s mortgage business model has similarities to my insurance practice.  Sal is an independent broker, meaning he has 35 lenders instead of 1 or 2.  Just like insurance, an independent broker will always have a better feel for a rapidly changing market because they track the movement in rates and product types across numerous companies. 

With 35 options, Sal has a mix of traditional loan options and then “niche companies” to place business with when there are higher risks, such as a buyer of a multiple family dwelling that will not be living there.  When the landlord doesn’t live in the building/house, there is less control and more risk of tenants not paying their rent, which can trigger mortgage defaults. 

Sal clearly explains key factors such as credits scores, number of units and loan to value which he considers when assessing risk, and where he should place the loan.  For example, a $500,000 property with a $250,000 down payment is much less risky than a $50,000 down payment.

Professional Mortgage Solutions Inc. is located at 62-81 Woodhaven Boulevard Rego Park, New York 11374.  Sal can be reached at 718-457-4290.

Buying a home or an investment property is one of, if not, the biggest expenses that one will incur in their lifetime.  These decisions are critical and what is also critical is utilizing the advice of savvy experienced brokers who have your best interest in mind!  For more information, feel free to reach out to me at Rob@InsuranceDoctor.us.

Recent Posts

  • Real ID = Real Hassles?
  • 23andMe Data Breached!
  • Funflation is Here!
  • Gift Card Mania & Return Policies
  • Package Theft Insurance?

Recent Comments

  • Vivianne and Jonathan on 10 Interesting Facts about the U.S. Tennis Open
  • Alojamiento web on 5 Mistakes to Avoid When Applying for Your Student’s Financial Aid
  • Jim Canavan on 4 Fun March Madness 2016 Questions

Archives

  • May 2025
  • April 2025
  • March 2025
  • January 2025
  • December 2024
  • November 2024
  • October 2024
  • September 2024
  • August 2024
  • July 2024
  • June 2024
  • April 2024
  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • January 2017
  • December 2016
  • November 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • July 2014
  • March 2014
  • November 2013
  • June 2013
  • November 2011

Categories

  • 529 college savings plan
  • activities
  • Affordable Care Act
  • aging
  • annuities
  • Australia
  • Auto
  • Auto Insurance
  • baseball
  • basketball
  • Belmont Stakes
  • budget
  • California
  • career
  • casualty insurance
  • children
  • coffee
  • College Funding
  • College Planning
  • Consultation
  • coronavirus
  • COVID-19
  • credit
  • Disability Insurance
  • Donald Trump
  • economy
  • employers
  • FAFSA
  • family
  • family leave
  • Federal Student Aid
  • Film & Entertainment
  • Finances
  • Financial Aid
  • financial planning
  • fitness
  • food
  • football
  • goals
  • golf
  • government
  • hanukkah
  • health
  • Health Insurance
  • healthcare
  • holidays
  • Home
  • Homeowner's Insurance
  • hurricane
  • income tax refund
  • inflation
  • Insurance
  • Investments
  • Italy
  • leisure
  • Liability
  • Life
  • Life insurance
  • London
  • Long Term Care
  • lottery
  • marriage
  • natural disaster
  • new year's
  • New York
  • nutrition
  • Obama Care
  • olympics
  • Paycheck Protection Program
  • Planning
  • premium finance
  • privacy
  • professional
  • Queens
  • Radio
  • Real Estate
  • resolutions
  • Retirement
  • same sex couple
  • school shopping
  • self employment
  • shopping
  • small business
  • sports
  • taxes
  • tennis
  • travel
  • Uncategorized
  • UNICO
  • US Open
  • vacation
  • veterans
  • wages
  • wellness
  • WRNW

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
back up
© Intelisano & Associates All Rights Reserved