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Do you believe the hype or the facts?

Everyone had a huge blow up about the mortgage fees charged by Fannie Mae and Freddie Mac, making it appear as if the people with a lower credit score has somehow miraculously gained an advantage over people with higher credit scores and now they have to pay less fees on their mortgage. That is the hype! Now, would you like to hear the facts?

It has always been known that if you have a lower credit score, the cost for everything credit related is going to be more expensive for you. Mortgage fees are no different. However, the gap between the Loan Level Price Adjustments (LLPA) for those with a higher credit score, vs someone with a lower credit score was vast, and the actual change to these fees did not close the gap, it just brought them a little closer.

This is a better way to see it. "Using an 80% loan-to-value ratio as an example, your LLPA at 640 is 2.25% versus 0.875% for a 740 score. That's a difference of 1.375%, or just over $4000 on a $300k mortgage," says Matthew Graham at Mortgage News Daily. Although this is a big change, it doesn't even come close to meaning higher credit score borrowers will pay a bigger fee.

I am all about the facts and I want to share so people will be sure to get them and not fall into believing the hype. Check out the source below and view the charts for a more clear understanding.

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