Mortgage Update: April 23

What to Know About the Upcoming Loan Level Price Adjustments - Effective May 1st, 2023

There has been a lot of discussion over the past week about the loan level price adjustments going into effect May 1st, 2023.  From a lender's perspective, they've been around for the last 30 to 45 days.

So if you've been quoted an interest rate, if you've gotten pre-approved and locked in your interest rate, nothing is changing. It's just the delivery date for lenders is May 1st, which is why they've been in effect for the last 30 to 45 days. So, no worries there!

What is a loan level price adjustment? A low level price adjustment is a change to what your base interest rate is. That change is based on your down payment or loan-to-value and your credit score. 

All the information in the news this week was discussing how the higher credit score loan level price adjustments are increasing and the lower credit score loan level price adjustments are decreasing. Although true, the "better credit score" borrowers are still getting a better interest rate.

If you're a first-time homebuyer (anybody that has not held title in the last three years) and your income is 100% or under the average median income of what of the area that you're buying, those lower level price adjustments go away.

The FHA, which is the regulator for Fannie Mae and Freddie Mac, is trying to incentivize first-time buyers and lower credit score borrowers to get into the market. Yes, this is an adjustment and it's not ideal, but we are here to guide you along the way. 

Please let us know if you have any questions or need to get pre-approved. The market is definitely heating up! We'd love to help.

Please email mortgages@johnadamsmortgage.com.