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Why refinancing your home will get more expensive on Dec. 1

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(WQOW) - Many homeowners are taking advantage of low interest rates to refinance their houses and after December 1 there could be a new fee to refinance.

Fanny Mae and Freddy Mac will add a new adverse market fee of 0.5% beginning on December 1.

According to the Wisconsin Bankers Association (WBA), the fee is the result of risk management related to the current economic uncertainty. 

The WBA says this will add an average of $1,400 to the cost of refinancing but it will only apply to mortgages over $125,000.

"Fanny and Freddy are expecting losses to be high as we move ahead six, 12, 24 months from now. They're concerned about defaults for homebuyers. Hopefully, that's not going to be reality. Hopefully the numbers that they might be anticipating will end up being a lot less," said Rose Oswald Poels with the WBA.

According to CNN, Fanny Mae and Freddy Mac guarantee half the home loans in the United States.