Biden admin raises costs for homebuyers with good credit
ALBUQUERQUE, N.M. — A Biden administration rule is set to take effect that will penalize good-credit home buyers to pay more for their mortgages. This would foot a part of the bill for those with lower credit scores, considered higher-risk borrowers.
If you have a credit score around 680, you would pay around $40 more per month on a $400,000 mortgage under the adjusted rules that go into effect May 1.
Local mortgage lender Grant Harvey says this is terrible timing, because the housing market has already struggled with multiple interest rate hikes by the Federal Reserve.
The goal is to narrow the gap in access to credit, especially for minority home buyers who often have lower down payments and lower credit scores.
Harvey says there are already resources in place or those who have lower credit scores.
“There an FHA product that basically gives you a standard rate and a standard mortgage insurance premium,” Harvey said. “Those are in place for lower FICO score people, and they’re it, so it’s less punishing. What happens is FHA gets their money up front, and that’s the way they can sign a subsidized these rates.”