Considering purchasing or refinancing? If yes, be prepared to send in your financial documentation as soon as possible.  Fannie Mae and Freddie Mac have been ordered eat the losses to pay for federal tax cut extensions.

Congress has mandated that Fannie Mae and Freddie Mac must increase their guarantee fees charged to all sellers. The new fees are effective immediately and inherently raise the costs of all conventional mortgage loans by 50 basis points.

Mortgage loan costs are rising in 2012 on lock extension’s and re-locks.

These changes only affect conventional loans. They do not affect government loans including USDA or FHA Mortgages.

Effective Today January 18th the new Fannie Mae and Freddie Mac loan costs are in effect:

• All-new Conventional loans originated January 18 on-word are more expensive by 50 basis points automatically built into the pricing of the new mortgage loans.
• Lock extensions: costs are rising by 40 basis points. For example if you originally lock your loan for 30 or 45 days you need to make sure you close within that initial time frame. If you close escrow outside of that initial 30-45 day time frame, you will be paying an extra 40 basis points of the loan amount on the final closing statement. On a $300,000 mortgage that equates to $1,200.
• Re-locks on expired loans: this fee is now 38 basis points of the loan amount.

These changes affect the entire mortgage loan industry. That means if you’re working with a big bank, a correspondent lender, or even a local mortgage broker, these fees will still apply.

Here’s what to do about mortgage loan costs rising.

Get your financial documentation in time. This means when you lender needs an updated pay stub or a bank statement, get to them within 24 business hours. Proactively obtaining conditions your lender’s underwriter creates will ensure that you close with in your locked time frame to avoid these unnecessary costs. Begin your online prequalification now.

Learn how to avoid the rising mortgage loan costs.