LLPA: How Loan Level Price Adjustments Impact the Cost of a Mortgage
Loan-level price adjustments (LLPA), are something most borrowers are completely aware of. But they directly impact the rate and fees you pay for a mortgage. If you’re planning to refinance your mortgage or buy a home, it’s good to understand how LLPAs work so you can set yourself up to get the best deal possible.What are LLPA?
Simply put, LLPAs are added charges for certain risk factors on a mortgage. They are high loan-to-value (LTV), low credit scores, cash out, investment property, etc. They’re calculated and assessed as a percentage of the loan amount. For example, if the loan amount is $100,000 and the total LLPAs equals 0.25%, the charge would equal $250.
