Significant changes to pricing Mortgages

By
Mortgage and Lending with CMG Home Loans NMLS 248937

LLPAs/Add-ons Significant increases!

For Conventional Mortgages there have been Loan Level Price adjustments since 2008. Simply put- not everyone gets the same rate with these adjustors adding price for risk.

While there has always been some minor adjustments to the LLPAs each year this is the biggest change since the advent of LLPAs. We will start seeing these changes on rate sheets in the next few weeks for 60 day locks... 

Here are some of the highlights:

The negative side:

  • Ever since we had LLPAs 740 was the magic number for credit scores. This will be a significant change with 2 new credit buckets 760+ and 780+  So the new magic number for Credit score is 780.
  • There are higher add-ons for most loans with credit scores between 680-779
  • Refinances will be significantly more expensive VS a purchase
  • DTI Add-ons for the first time ever.  Loans with higher Debt to Income Ratios will have an add on with less than 40% down. This one is the one that is likely to cause the most confusion, Miscalculated income, A surprise change in debt, Higher Taxes or higher Home Insurance all have the ability to pop the DTI higher causing a need to redisclose loans.
  • On the positive side:
    • The add-ons for lower credit scores have improved,  640 and 660 scores have the add-ons significantly reduced
    • 3% down Has SIGNIFICANT improvements across all credit scores
    • Multi Family add-ons improved
    • LLPA waivers are possible for first time buyers with incomes below the area median income, or below 120% of the areas median income in "High Cost" Areas.  (This one is new and available today)

 

When? The new LLPAs will be based on delivery to the agencies May 1. You will see these showing up for all lenders with rate expirations/closings after 4/15/2023.

There are more rumblings out of the FHFA  that we may see more to come which will further worsen pricing.

Bottom Line:  If you are looking to buy or Refinance a home Soon, you may want to ACT NOW and close before April 15th.

If you need a Mortgage or an Equity loan, We can help- Everywhere but UT, Give me a call.

Robert Rauf 
Mortgage Loan Originator NMLS# 248937
http://www.homebridge.com/RobertRauf 
or my blog: http://activerain.com/blogs/rrauf 
Office: (732)908-4868  Cell (732)740-0175 

RRauf@HomeBridge.com 
www.RobertRauf.com
 
 

Since 1987 I have been helping my clients fulfill their dream of home ownership! HomeBridge Financial Services, Formerly REMN, HomeBridge Financial Services is located at 9 Grand Ave, Building 2 Suite A Toms River, NJ 08753. NMLS #6521. New Jersey Licensed Lender and Mortgage Banker #L041053. Visit www.Homebridge.com or www.RobertRauf.com for more information. NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey, Toms River NJ 08753, Toms River NJ 08755, Brick NJ 08723, Brick NJ 08724 Mortgage in Ocean County NJ, Mortgage in Monmouth County NJ, Jackson NJ 08527, Howell NJ 07731, Lacey 08731 08734, Beachwood 08722 Bayville 08721, 

Comments (2)

John Pusa
Glendale, CA

Hello Robert Rauf very good helpful report about changes to pricing mortgages.

Feb 01, 2023 02:14 PM
Robert Rauf
CMG Home Loans - Toms River, NJ

John Pusa Thanks for the comment and taking the time to read!

Feb 02, 2023 07:24 AM