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Chris Kopf Coldwell Banker Mountain Properties

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New Hidden Fees in Mortgages | Crested Butte

June 3, 2013 By Myreen Alcober

MortgageFormHouse

New Hidden Fees in Mortgages | Crested Butte

While only 30% of the transactions in the Crested Butte CO Real Estate market have a lender involved – with such low mortgage rates it may be smart to be aware.  A large government insurer, which could be in need of a bailout, has plans to generate $10 billion by locking borrowers in the middle class into high fees for years, even decades.

Consumers who don’t have much cash for a down payment when purchasing a home usually have to pay a higher interest rate than buyers with a larger down payment for the first few years of a mortgage. Now, due to a change in a government program, these buyers will be required to have to pay the high mortgage rate for as long as 30 years.

Lenders typically require that borrowers take out mortgage insurance when they don’t pay 20% of the home’s purchase price in a down payment, or have 20% equity when refinancing a mortgage. Beginning next month, one of the U.S.’s major insurers will start mandating that borrowers who take out their insurance pay premiums as long as the mortgage is in their possession. For the past 10 years, the lender has permitted borrowers to cancel their policy when their loan balance falls to 78% of the home’s value, which eliminates the necessity for mortgage insurance.

At the current rates, with a 5% payment, this process would take 7 years.

The change of a component of a broader financial plan to boost the finances of the lender, which some would say is definitely in a financial hole. Last month, the lender raised its premium for insurance. Now, a homeowner getting a loan with FHA mortgage insurance will, on average, pay an interest rate of 4.7% for a 30-year fixed rate loan, as opposed to 3.4% for borrowers putting down 20%.

However, the largest boost to the lender’s finances is projected to come from making the insurance premium a permanent fixture. Officials for the lender estimate that the change would have locked $10 million in additional fees for the lending company on mortgage that it insured in the past three years alone. That’s also the additional amount that borrowers will owe over the lifetime of their home loans.

The issue is that the major lender is going to be forcing those who borrow from the company to pay for the insurance long after it’s needed. Private mortgage insurers are legally required to cancel a borrower’s policy once they have come to the 20% home ownership threshold. However, this major lender is exempt from this law. It’s not even completely clear that the lender actually needs the money.

Recently, the Obama administration estimated that the lender may need around $943 million over the next fiscal year to cover expenses. This does not include any gains the lender may have acquired from legal settlements. Most importantly, all of the $943 million is designated for expected losses in the lender’s reverse mortgage program, which isn’t by the premium payments extension.

How can I help you?  If you want to speak with a lender contact me as I can refer you to a local lender familiar with the Crested Butte Real Estate market.  If you are curious as to what you can expect from me as your Crested Butte Real Estate Agent – I encourage you to preview my website and contact me to start a conversation. If you are interested in finding out what your existing property is worth, or considering me to represent you as a Buyer, I would appreciate the opportunity to earn your business (or that of a friend you think I could help).  It would be my pleasure to be your Crested Butte REALTOR
If you have not visited my website, one nice feature people say they like is the Advanced MLS Search. I also frequently publish new interesting Crested Butte area content and videos to the News/Blog section – check it out.
Chris Kopf

Previews® Property Specialist
Coldwell Banker Bighorn Realty (970) 209-5405  chriskopf@bighornrealty.com
Author:  Chris Kopf

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Chris Kopf, Coldwell Banker Mountain Properties
305 6th Street
Crested Butte, CO 81224
  • Chris.Kopf@CBMP.com
  • (970) 209-5405

Testimonials

Bobby Nichols

"The first moment we met Chris, my wife and I knew he was all about what is happening in real estate sales in Crested Butte. He knows his job, the marketplace and the innovative ways to market your home in today's electronic internet space. A real professional that understood us and our needs in handling a very successful sales transaction. "

 
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:45:19-07:00
"The first moment we met Chris, my wife and I knew he was all about what is happening in real estate sales in Crested Butte. He knows his job, the marketplace and the innovative ways to market your home in today's electronic internet space. A real professional that understood us and our needs in handling a very successful sales transaction. "  
https://chriskopf.com/testimonials/bobby-nichols/

Jeff Hollings

Chris is outstanding! We recently bought a second home in Crested Butte and Chris did a great job throughout the whole process. He has a thorough understanding of the market and the benefits and drawbacks of various locations. He was very patient with us as our preferences evolved throughout the search. He gave us valuable information on which to negotiate the purchase. He had great follow-up during the inspection/closing process (when we were not in town) and made sure all of the commitments made by the seller were properly completed.
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:46:48-07:00
Chris is outstanding! We recently bought a second home in Crested Butte and Chris did a great job throughout the whole process. He has a thorough understanding of the market and the benefits and drawbacks of various locations. He was very patient with us as our preferences evolved throughout the search. He gave us valuable information on which to negotiate the purchase. He had great follow-up during the inspection/closing process (when we were not in town) and made sure all of the commitments made by the seller were properly completed.
https://chriskopf.com/testimonials/jeff-hollings/

James Brennan

This was our first experience trying to purchase additional land with hopes of building a home. Chris was tremendously helpful throughout the entire process and his professionalism showed.
Crested Butte Real Estate by Chris Kopf
2014-10-14T17:59:24-06:00
This was our first experience trying to purchase additional land with hopes of building a home. Chris was tremendously helpful throughout the entire process and his professionalism showed.
https://chriskopf.com/testimonials/james-brennan/

Jane Saltzman

Chris was terrific to work with. The house sold faster then I ever expected! He was particularly helpful for this second home owner that couldn't always get there to take care of house issues. Thank you Chris!!!
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:49:37-07:00
Chris was terrific to work with. The house sold faster then I ever expected! He was particularly helpful for this second home owner that couldn't always get there to take care of house issues. Thank you Chris!!!
https://chriskopf.com/testimonials/jane-saltzman/

Georges Lussier

The thought of a short sale was intimidating, but Chris made the experience very easy with lots of guidance from start to finish. I would highly recommend Chris for any Real Estate need buying or selling.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:05:40-06:00
The thought of a short sale was intimidating, but Chris made the experience very easy with lots of guidance from start to finish. I would highly recommend Chris for any Real Estate need buying or selling.
https://chriskopf.com/testimonials/georges-lussier/

Frank Stringer

Chris Kopf is a wonderful person to work with on any real estate matter you may have in Crested Butte. He is extremely knowledgeable of all elements of the Crested Butte area. He helped us recently to buy a new second home in Skyland and the entire experience was first class under Chris's guidance. I would highly recommend him to anyone who has a real estate need in Crested Butte.
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:51:04-07:00
Chris Kopf is a wonderful person to work with on any real estate matter you may have in Crested Butte. He is extremely knowledgeable of all elements of the Crested Butte area. He helped us recently to buy a new second home in Skyland and the entire experience was first class under Chris's guidance. I would highly recommend him to anyone who has a real estate need in Crested Butte.
https://chriskopf.com/testimonials/frank-stringer/

Paul & Julie Keesee

Chris was quite helpful in showing us homes in the area we were interested in and contacted us when new listings were available. We not only consider him our realtor but also a friend.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:05:59-06:00
Chris was quite helpful in showing us homes in the area we were interested in and contacted us when new listings were available. We not only consider him our realtor but also a friend.
https://chriskopf.com/testimonials/paul-julie-keesee/

Jim & Sandra Wickham

Chris' patience and persistence paid off for us in finding the right house for the right price. We would highly recommend Chris to any potential buyer.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:06:18-06:00
Chris' patience and persistence paid off for us in finding the right house for the right price. We would highly recommend Chris to any potential buyer.
https://chriskopf.com/testimonials/jim-sandra-wickham/

Tom & Mary Aton

It was a great experience working with Chris, after showing me what I thought I wanted, he advised me of the pros and cons on the different condos and found one that I am thrilled with.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:06:31-06:00
It was a great experience working with Chris, after showing me what I thought I wanted, he advised me of the pros and cons on the different condos and found one that I am thrilled with.
https://chriskopf.com/testimonials/tom-mary-aton/

Dan Aquaviva

This agent has a very strong knowledge of the local area. He was very helpful in screening properties for potential purchase.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:05:26-06:00
This agent has a very strong knowledge of the local area. He was very helpful in screening properties for potential purchase.
https://chriskopf.com/testimonials/dan-aquaviva/
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Crested Butte Real Estate by Chris Kopf

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