Could Your Next Mortgage Cost Less?
With mortgage rates back above 7%, the cost of financing a home has become one of the biggest hurdles for buyers. The Mortgage Bankers Association has released a new plan aimed at bringing some of those costs down, and most of its proposals could be carried out by regulators and federal agencies without a vote in Congress.
The roadmap, released in mid-October, focuses on several costs that add up at the closing table. One proposal would allow lenders to pull a single credit report, rather than the current three, for borrowers with credit scores above 700. The association says credit report costs have tripled or quadrupled over the past five years. Another would reduce the pricing fees Fannie Mae and Freddie Mac add to many purchase loans, where a quarter-point cut could save about $1,000 upfront on a $400,000 loan.
The plan also takes aim at monthly payments. A 0.20% reduction to FHA’s annual mortgage insurance premium would save a borrower nearly $800 a year on a $400,000 loan, and a streamlined refinance option would make it easier for homeowners with strong payment histories to lower their payments.
It is important to note that these are recommendations, not adopted changes, and policy tends to move slowly. Relief could come sooner from the markets themselves. If the recent AI-driven stock rally continues to cool, investors often move money into bonds, which can help bring mortgage rates down.
In the meantime, buyers still have options today. With the market noticeably cooler this fall, seller concessions are often used to fund a rate buydown, which can lower both the interest rate and the monthly payment, sometimes significantly.
Whether you are planning to buy in the year ahead, considering a refinance, or simply keeping an eye on borrowing costs, reach out anytime. I am always happy to show you what a buydown or other options could mean for your budget!
