Understanding New LLPA’s

You may have heard the headlines that people with high credit scores are getting a worse deal on their home loans than people with low credit scores. That's very misleading. Let's take an example. 5% down payment, 740 versus 640 credit score. Well, what used to happen is there'd be a 2.5% difference in pricing, not interest rate. So let's take a $300,000 loan amount times 2.5%. That's $7,500 difference in points or fees. Or they would build that into the interest rate. Well, they've slashed that down to where it's now only a 1.25% difference in points or fees. So still higher credit gets a better deal. It's just 3750 difference instead of $7500 like it used to be. They just closed the gap a little bit. So really, this helps people below 680 credit on a conventional loan. However, kind of the ironic thing is below 680 credit is having a very tough, tough time getting approved for conventional loan these days. Fannie and Freddie are offering a better deal on pricing, but they're not offering a better deal on approving that loan. So really, there is a little bit of false hope here if you ask my honest opinion, because that person below 680 credit is probably going with an FHA loan. Good news is FHA employ improve their mortgage insurance and they don't have much of a difference in pricing for the different credit score tiers. So there is great home loan financing options out there. It's just probably not conventional. So all these headlines are kind of for nothing if you ask my honest opinion there. And it already has been built in. I know they say May 1st is the date where they implement this, but that's the date where the loan has to close and get delivered to Fannie Mae. So lenders already priced this in the last couple months because they've seen this coming. This announcement came back out in January. We were telling people about it then.