Your total mortgage payment consists of the principal, interest, property taxes, homeowners insurance and mortgage insurance (if applicable). If you’re considering buying or refinancing your home, there are some ways that you may be able to lower your total mortgage payment.
Tips for Lowering Your Mortgage Payment
May 17, 2024 by Leave a Comment
FHFA Rescinds the DTI Price Hit (LLPA)
May 10, 2023 by Leave a Comment
The Federal Housing Finance Agency (FHFA) announced earlier today that it is rescinding the debt-to-income (DTI) loan level price hit adjustment (LLPA) that was announced in January of this year. Previously, people with a debt-to-income ratio higher than 40% with a loan-to-value greater than 60% would have an additional price hit to their interest rate. This price hit makes it even more challenging for someone who is pushing the DTI limit to remain under the 40% number to avoid having either a higher rate or paying more for the same rate because of the LLPA. The additional price hit for DTI ranged from 0.25%-0.375% depending on the loan to value/how much equity is in the transaction. On a $400,000 loan, this would be an additional cost of $1,000 to $1,500 if paid as “points” instead of having it priced into the interest rate. [Read more…]
Price Adjustments coming soon to Conforming Mortgages
January 24, 2023 by Leave a Comment
Last week, the FHFA (Federal Housing Finance Agency) announced changes to how conforming mortgages are priced with loan-level price adjustments (LLPAs). Some borrowers will find improved pricing where others will have to pay more in fees. The fees are typically incorporated into the interest rate for the mortgage.
From Fannie Mae’s Lender Letter dated January 19, 2023:
“We are implementing additional changes to our LLPA framework that represent the next step in our effort to increase support for borrowers historically underserved by the housing finance market…”.
Mortgage Rates for Second Homes and High Balance Mortgages are Going UP
January 5, 2022 by Leave a Comment
The FHFA announced today that the pricing of mortgage interest rates for second homes or high balance mortgages will be more expensive. This impacts conventional mortgages (Fannie Mae and Freddie Mac) and is effective for loans that are delivered on or after April 1, 2022 – i.e. I expect to see the price increases to start happening soon. [Read more…]
Conforming Loan Price Adjustments (LLPAs): What They Are and How They Affect Your Mortgage Rate
December 12, 2013 by 3 Comments
Editor’s Note: This post was originally published in December 2013 and covered specific LLPA changes that took effect in 2014. Those details are now historical. This post has been fully updated to explain how LLPAs work today and why they still matter for anyone getting a mortgage.
When you apply for a conventional mortgage, the interest rate you’re quoted isn’t just based on what the market is doing that day. It’s also affected by a series of risk-based pricing adjustments called Loan Level Price Adjustments — or LLPAs.
LLPAs are fees charged by Fannie Mae and Freddie Mac that get built into your mortgage rate or closing costs based on specific characteristics of your loan. Understanding how they work can help you make smarter decisions about your down payment, credit score, and loan structure before you apply. [Read more…]
