How a New Mortgage Rule Change Could Raise Interest Rates and Cost Homebuyers Thousands

Homebuyers could save a few dollars upfront – only to pay more than $20,000 over the life of their mortgage. That is not affordability. It is a mortgage change that could raise costs for families at the exact moment President Trump is focused on making homeownership more attainable.

Buried inside the mountain of paperwork that comes with buying a home is a small credit-reporting cost most Americans have never heard of. It is called a tri-merge report, and it requires lenders to pull credit data from all three major credit bureaus before approving a mortgage.

Now, mortgage lenders want to weaken that standard. Instead of pulling all three reports, they want to switch to a bi-merge system that uses only two. That may sound like a minor paperwork change. It is not.

Mortgages are priced on risk. If lenders and investors have a less complete picture of a borrower’s credit history, they can demand higher interest rates or fees to account for that uncertainty. That is the danger of bi-merge. It may shave a few dollars off the upfront cost of a credit report, but it can make the mortgage itself more expensive for the family buying the home.

Read more in Breitbart.