The situation and uncertainty going on in Greece has translated to slightly decreased interest rates. Investors are taking money out of stocks and putting them into the safer haven of bonds, so that is causing mortgage bonds to improve, which in turn improves rates. However, at the same time that this has occurred, Fannie Mae instituted more costly fees for certain loan parameters. So even though we would have seen better rates, these hits have pretty much washed out any gains.

Some examples of the new “hits” are:

  • Loan-to-Value (LTV) ratio between 75.01-80.0% with a middle credit score of 740 or greater now costs .25% more than it did previously
  • LTV ratio 60.0% with credit score 700 or greater used to provide an improvement of -.25%; now, there is no improvement
  • Investment properties with 75% or below LTV had a hit of 1.75%; now, it is 2.125%
  • Not listed in the chart, but streamlined among all lenders is that any high-balance loan amount (loan > $417k) has an additional .25% hit

These additional costs coupled with a natural trend in rising interest rates (overall) means higher interest rates than we have seen in some time.

Click below to see the actual table for these Loan Level Price Adjustments. The top portion applied to loans locked prior to 7/1/15; the bottom chart is what is currently in effect.

Loan Level Price Adjustment Changes