Rate Paydown for Fannie/Freddie Conventional Loan?

4 Replies

Hello Fellow Investors,

I have a question regarding conventional refinancing. I am in the process refinancing a property from a HML to a 30 year Fannie/Freddie loan. Unfortunately, one of the worst things happened to me at the worst time - I had a credit derrogatory mark show up. Now, this mark is unsubstantiated (long story) and will be removed but will take 30-90 days to fix. Anyone who has had a HML knows that is expensive time.

With that said, my current score at 649 dropping over 100 points, put me at a rate of 5.75% (not terrible) but my lender is saying there is a $930 fee to pay down the rate to 5.75%. When asked about the rate, I was told that it is a Fannie/Freddie required fee.

My question is, is that correct? 

Please keep in mind, I have done this type of refinancing 4 times this year, 3 with this lender, so I am not a new customer. I also have paperwork proving the derrogatory marks unsubstantiated. Any thoughts would be helpful! Thanks!

@Michael Cohen , I'm more than happy to do so, however I want to ensure that I won't end up with the same situation at the next lender. Loan officers don't have a squeaky clean record with me and their promises...

Can you confirm this is 100% a lender fee and not a Fannie/Freddie Requirement?

Originally posted by @Lane Forhetz :

@Michael Cohen, I'm more than happy to do so, however I want to ensure that I won't end up with the same situation at the next lender. Loan officers don't have a squeaky clean record with me and their promises...

Can you confirm this is 100% a lender fee and not a Fannie/Freddie Requirement?

For a couple of reasons, I cannot 100% confirm this is a lender fee; perhaps you misunderstood what he was saying, or what the fee was. I can tell you with 100% certainty that buying down a rate is absolutely not a Fannie/Freddie requirement. Spending money to purchase a better rate is your prerogative as a mortgage consumer.

@Michael Cohen , thanks for that! He for sure said it was a Fannie/Freddie requirement. I appreciate the information, that helps me a lot. 

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