Loan Level Pricing Adjustments
With all the good news last week about FHA loans becoming cheaper, it’s also important to understand what’s happening with Conventional Loans this year. So Fannie Mae and Freddie Mac announced earlier this year that they are making some significant changes to what’s called Loan Level Pricing Adjustments which determines how much the interest rates are impacted by your credit score and down payment on Conventional mortgages. But now your debt to income will also play a big factor in your rates. This applies to Conventional mortgages and does not impact FHA and VA loans and a lot of lenders have already implemented these changes causing rates to go up for many home buyers, and so what that means is that it is super important to speak with a loan officer that is well versed on these impacts so they can best advise you on how to structure your loan if you’re looking at buying or refinancing your home. For example, 1st time buyers will now have better pricing adjustments than before, but if you put too much money down, you may miss out! Before you do anything, give us a call!