Risk Based Pricing Explained

By
Mortgage and Lending with Free State Mortgage, LLC

I've had a few questions in regard to the risk based pricing and what it means to your clients.  These adjustments are not targeted on the 100% purchase programs, but this may vary from lender to lender.  In a nut shell, your clients will qualify for less because the rates will go up for the lower credit score borrower. 

The following are RISK-BASED adjustments that apply to all programs unless specifically excluded below:

  

For LTV's greater than 70% with credit scores listed below

 (My Community Mortgage, Home Possible, EA1, 10/15 year Terms are excluded):

  

CREDIT SCORE LOAN LEVEL PRICE ADJUSTMENT

  

Below 620                    2.000

  

620-639                         1.750

  

640-659                         1.250

  

660-679                         0.750

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