Rates dropped to historic lows over the past year and a half, with many homeowners taking advantage of these market conditions and refinancing their mortgages. Refinancing to a lower rate can save you big on your monthly payment and the overall interest you’ll end up paying on your loan. So it’s no wonder why many people were taking advantage of this opportunity, especially in a market otherwise filled with uncertainties.
If you hadn’t taken advantage of these low rates, you might have felt like you missed out on the chance to save big. In August 2020, the FHFA announced an adverse market fee, which went into effect in December 2020. This fee was meant to stem off hefty potential losses related to COVID-19. It was a 50-point basis fee, which meant a fee of 0.5% of the loan balance.
As the housing market continues to show strength alongside a steady COVID-19 recovery path, the FHFA was able to eliminate this fee for loans closing on August 1, 2021 and beyond. This may come as a welcome surprise to anyone who thought that they had missed out on substantial savings in the refinance boom of 2020. You haven’t, and it’s not too late to save!