Mortgage fee changes are coming May 1, favoring those with lower credit scores

Mortgage rates for homebuyers are changing next month. Fees on mortgages backed by Freddie Mac and Fannie Mae will go up for some and will go down for others.

So how does this make sense for first-time homebuyers? Financial coach, Dr. Lynn Richardson explained the details of what's coming May 1.  

She explained that the federal government wants to make it possible for everybody to be able to afford to buy a home, so they are decreasing the fees for those with lower incomes and increasing fees for those with higher credit scores.

Those with top credit scores will still likely pay less than those with low credit scores, however, the penalty now for having a lower credit score will be smaller.

So is now a good time for first-time homebuyers to buy? Richardson said yes, buy what you can afford, especially in Southern California where for many people it's more difficult to rent than it is to buy. 

"Now is a good time to buy a home that you can afford for the budget that you have. Because even if the interest rate is 7%, the interest rate on your rent, comparably is thousands, you know. Basically, you don't get any equity when you rent," said Richardson.