New Loan Level Price Adjustments [LLPAs] for >70% LTV

 

Yesterday, Fannie Mae “in light of the continued deterioration in the housing market” has decided to discourage more people from buying homes.  They will be charging aditonal loan level price adjustments for loans they consider risky.  I have listed some highlights of the new penalties.  When reading the following information it is important to note that each .40-.50 mean an additional .125% penalty to your interest rate.  It is important to note that without a 680 credit score, most mortgage insurance companies require 5% down. 

The Loan Level Price Adjustments will make it more important than ever to work with an FHA approved lender.  The Grau Team at Cornerstone Mortgage is able to offer the best FHA rates in the nation.  You can apply online now to see what we can do for you.

 

Loan to Value Penalties for ALL Mortgages

>720 credit | No Penalty 

680-719 credit | >70% = .500% points [about +.125% rate for less than 30% down]

660-679 credit | >75% = 1.25% points [about +.375% rate increase <25% down]

640-659 credit | >75% = 1.75% points [about +.500% rate increase <25% down]

620-639 credit | >75% = 2.5% points [about +625% rate increase <25% down]

<620 credit | >75% = 2.75% points [about +725% rate increase <25% down]