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This week's piece is titled "Your mortgage rate is treated like auto insurance". It talks about how conforming mortgages -- from California to Maine -- are subject to "risk-based pricing" called Loan-Level Pricing Adjustments.
LLPAs work similar to how auto insurance works.
An excerpt:
In the world of auto insurance, "riskier" car owners pay higher rates for insurance. The sports car pays more than the minivan; the street-parker pays more than the garage-parker; and the low deductible pays more than the high deductible. Instinctively, this makes sense.
The same concept applies in the world of mortgages. The more risk that you -- as an individual -- represent to Fannie Mae or Freddie Mac, the more you will pay for your mortgage.
See How Much YOUR Loan Is Marked Up
The official Loan-Level Pricing Adjustment guidelines are complicated. So, I built a link to get more details for your exact scenario. You can access it here. Just punch in your loan traits and well get you your loan rate and markup.
Markups can be as high as 3.000 percent against your loan size.
Not all loan programs are sold through Fannie Mae or Freddie Mac, thankfully, so there are ways to avoid the large LLPA fees. I can talk you through it by phone or email anytime. Call me at 5615-426-3182, or click here to send me an email.
You can also cut to the chase, if you prefer. Click here to use my safe and secure Pre-Qualification Link.
About the Author
Shawn Kaplan is an active, multi-state Licensed loan officer with Access National Mortgage. Email Shawn at skaplan@accessnational.com or call 615-426-3182.
Bonus: Click to get a free, no-obligation rate quote. I love to work with my readers!
