NASHVILLE, Tenn. (WTVF) — Starting May 1, people with higher credit scores will start paying higher mortgage fees, while those with lower credit scores will pay less.
The goal is to boost affordable housing and help borrowers that may have a lower credit score to get into a home.
The changes are part of a Biden Administration rule intended to provide equal access to home ownership. It comes as there's an affordable housing shortage nationwide.
That problem is no stranger to Nashville, and a big concern for a lot of people as the city continues to grow.
This means first-time home buyers with high credit scores between 720 and 760 will pay more under the new rule. For example, someone with a 740 score that puts five percent down, would see an increase of about $1,500.
The biggest increases could impact those putting 15 to 20 percent down on a home. Experts said a rule like this has always existed, this is just updated as loan level prices are being adjusted.
"It's not as drastic as what like people are thinking, you know, the biggest thing you're seeing is that it drops a lot of the cost on those lower scores. So, you know, it might be slightly more expensive in certain scenarios, but it's a very, very minor cost," said financial expert Mario Larrea.
There is a bill in Congress that would repeal the new policy.
