Top Guide To Higher Priced Mortgage Loan And Its Requirements

Abstract

About Higher Priced Mortgage Loan When you are planning to purchase a property using a mortgage, the lender or the bank providing you the mortgage will charge you fees apart from the interest rate on the loan amount that you borrow. In some situations, your mortgage could be a higher priced mortgage loan. What Is A HPML? An HPML is also known as section 35 mortgage is a mortgage loan in which the APR is more than the average prime offer rate by a certain percentage margin that is being offered to highly qualified borrowers. First Loan Mortgage: The first mortgage hold the primary position in the lien stack in the property. If you are applying for a first mortgage that has a loan amount below the conforming limit, and the APR of the mortgage is higher than 1.5% than the APOR for the first mortgages, your mortgage will be considered as an HPML. The lender who holds the primary lien position gets paid first if the property is foreclosed. If you are taking a second mortgage, home equity loan, or a HELOC that has an APR of 3.5% higher than the APOR for second mortgages, your second mortgage will be considered an HPML. The lender who holds a second mortgage gets paid after the lender that holds the primary lien in case of a foreclosure. If your taking a jumbo loan that has an APR of 2.5% or higher than the APOR set for jumbo loans, your loan would be considered an HPML. Let's take an example Let's say that you are taking a mortgage to buy a new property with a loan amount less than the conforming limit with an APR of 5.75%. Your lender will check the APOR for the first mortgages.