Complexity Rises

Fannie Mae and Freddie Mac have implemented an entirely new spectrum of Loan-Level-Price-Adjustments which will affect many purchasing or financing a home going forward. The new pricing regimen include a wide-range of changes —

• Higher pricing for Debt-to-Income Ratios over 40%.
• Lower pricing for investors and second homes.
• Lower pricing for those with low credit scores and/or those putting less down.
• Higher pricing for refinances, especially cash out.
• Higher pricing for some with higher, but not the highest credit scores – even if putting over 10% down.

The pricing schematic is very complex, which makes it important to get your prospects to a lender as quickly as possible. With more time to work, the lender has a better chance of optimizing their financial situation and the transaction to achieve the best price. In addition, for those who are already pre-approved, the pre-approval should be reviewed immediately.

Source: Fannie Mae and Freddie Mac