<p><img src="https://static2.businessinsider.com/image/5fce79ceeadd8400183df916-1883/new-mortgage-refinance-fee.jpg" border="0" alt="new mortgage refinance fee" data-mce-source="Kelvin Murray/Getty Images"></p><p></p><bi-shortcode id="disclaimer" class="mceNonEditable" data-type="pfi"></bi-shortcode><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><ul class="summary-list"><li>As of December 1, the Federal Housing Finance Agency is charging lenders 0.5% of the principal for refinanced mortgages.</li><li>Some lenders are covering these fees themselves, while others are passing the fee onto borrowers.</li><li>You'll only have to pay this fee if your new mortgage is for $125,000 or more, and if you're refinancing into a conforming mortgage.</li><li>It may still be worth refinancing if you plan to stay in the home for a long timeyou may save enough money on the new mortgage over the years to offset the closing costs.</li><li><a href="http://newsletter.businessinsider.com/join/4np/personal-finance" target="_blank" rel="noopener" data-analytics-module="summary_bullets" data-analytics-post-depth="0" data-uri="11c8ffc9623a75216c65815dd08330db">Have the Personal Finance Insider newsletter sent straight to your inbox.</a></li></ul><bi-shortcode id="table-of-contents-sticky" class="mceNonEditable" data-type="h2">Table of Contents: Masthead Sticky</bi-shortcode><p>The Federal Housing Finance Agency started charging lenders a <a href="https://www.businessinsider.com/personal-finance/refinance-home-before-december-refinancing-fee-2020-9" target="_blank" rel="noopener">new fee for most new refinanced mortgages</a> on December 1.</p><p>Some lenders are paying the fee themselves, but others are passing the fee down to borrowersmeaning refinancing could become more expensive for you.</p><h2>What is the new mortgage refinance fee'</h2><p>The new refinancing fee is known as the adverse market refinance fee. Lenders pay this cost on refinanced mortgages they sell to Fannie Mae or Freddie Mac, two government lending companies.</p><p>Charging a new fee is an attempt to help Fannie Mae and Freddie Mac offset some of the losses they've experienced during the coronavirus pandemic.</p><p>The fee is 0.5% of a mortgage principal, so you'd pay $500 for every $100,000 you borrow, not including interest.</p><p>Your lender may roll this fee into your <a href="https://www.businessinsider.com/personal-finance/average-refinance-closing-costs" target="_blank" rel="noopener">closing costs</a>, so you'd pay the 0.5% at closing. Others are making up the difference by charging you a higher interest rate.</p><h2>Does everyone have to pay the fee'</h2><p>The FHFA is charging lenders the 0.5% fee, not borrowersbut some lenders are charging borrowers so they don't have to incur the fee themselves. So depending on which company you use to refinance, you may or may not pay the fee.</p><p>Additionally, you're exempt from the fee if your refinanced mortgage is for less than $125,000.</p><p>The new refinance fee only applies to <a href="https://www.businessinsider.com/personal-finance/conforming-loans" target="_blank" rel="noopener">conforming mortgages</a>, which are conventional mortgages for under a certain amount. You won't pay the fee if you have a <a href="https://www.businessinsider.com/personal-finance/what-is-a-jumbo-loan" target="_blank" rel="noopener">jumbo mortgage</a>, or if you refinance into a <a href="https://www.businessinsider.com/personal-finance/government-home-loans" target="_blank" rel="noopener">government mortgage</a> backed by the <a href="https://www.businessinsider.com/personal-finance/fha-loan" target="_blank" rel="noopener">FHA</a>, <a href="https://www.businessinsider.com/personal-finance/va-loans" target="_blank" rel="noopener">VA</a>, or <a href="https://www.businessinsider.com/personal-finance/usda-loan" target="_blank" rel="noopener">USDA</a>.</p><h2>Is it still a good time to refinance your mortgage'</h2><p><a href="https://www.businessinsider.com/personal-finance/average-mortgage-interest-rate" target="_blank" rel="noopener">Mortgage refinance rates are low overall</a>, and they'll probably stay low well into 2021. If your financial profile is good enough to <a href="https://www.businessinsider.com/personal-finance/ways-get-lowest-mortgage-refinance-rate" target="_blank" rel="noopener">secure a relatively low rate</a>, it may still be a good time to refinance.</p><p>You might not want to refinance if you plan to move in the next couple years, though. You still have to pay closing costs when you refinance, and these expenses typically come to thousands of dollars.</p><p>Now you have to pay yet another feeand if your lender charges you the fee as a closing cost, you'll have to pay it all at once. If you're only going to be in the home for another year or two, you may decide <a href="https://www.businessinsider.com/personal-finance/bad-reasons-to-refinance-your-mortgage" target="_blank" rel="noopener">the costs of refinancing aren't worth it</a>.</p><p>If you're considering refinancing, shop around for lenders and ask your top choices for <a href="https://www.businessinsider.com/personal-finance/homebuying-advice-from-mortgage-lender-2020-6" target="_blank" rel="noopener">itemized lists of fees</a>. This is a good way to compare and contrast each lender and ultimately decide if refinancing is right for you. And don't be afraid to ask outright if the lender is passing its adverse market refinance fee onto youand if so, how.</p><div><iframe src="https://smartasset.com/captivate/frame/umonjdcr" width="100%" height="630px" scrolling="auto" style="border: none;"></iframe></div><bi-shortcode id="related-content-module" class="mceNonEditable" data-type="more-on-refinancing-a-mortgage" data-sheetname="More on Refinancing a Mortgage">Related Content Module: More on Refinancing a Mortgage</bi-shortcode><p><a href="https://www.businessinsider.com/personal-finance/new-mortgage-refinance-fee-impacts-borrowers-2020-12#comments">Join the conversation about this story »</a></p>
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