Market update: FHFA eliminates Adverse Market Refinance Fee
In a great move for homeowners looking to take advantage of historically low interest rates, the Federal Housing Finance Agency (FHFA) on Friday eliminated the Adverse Market Refinance Fee. This 50-basis point fee had been put in place on December 1, 2020, with the goal of reducing the risk that Freddie Mac and Fannie Mae were taking on with the surge in refinances during the pandemic last year.
Lenders will no longer be charged the fee when they deliver refinanced mortgages to Fannie and Freddie starting in August. The hope is that the elimination of the fee will help families take advantage of the current low mortgage rates and save money each month.
Said FHFA Acting Director Sandra Thompson, “Eliminating the Adverse Market Refinance Fee will help families take advantage of the low-rate environment to save more money. Today’s action furthers FHFA’s priority of supporting affordable housing while simultaneously protecting the safety and soundness of the Enterprises,” referring to Fannie Mae and Freddie Mac.
Here’s why it matters
Removing this fee makes it less expensive for lenders, like Guaranteed Rate, to help you refinance your home loan. That’s good news for anyone who might be considering a refinance, especially considering that national average rates on a 30-year fixed rate mortgage just dropped to 2.88% last week according to Freddie Mac.*
This decision also is one of the first actions taken by President Biden’s administration after removing the previous head of the FHFA, Trump-appointed Director Mark Calabria. It hints at an approach to housing policy focused on helping families save money.
Here’s how we can help
Now is still a great time to refinance your loan, and Guaranteed Rate can help you take advantage of today’s historically low rates. Reach out to one of our loan officers or start your refinance application online to lock in your rate, before closing your refinance in August after the fee has been officially phased out.
*National average rates are not advertised rates. Contact Guaranteed Rate for up-to-date rates and more information.
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