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This topic contains information about higher-priced mortgage loans, including:
👊Definition of the HPML
👊Requirements for HPML loan
Definition of the HPML
In general, a higher-priced mortgage loan is one with an annual percentage rate, or APR, which is higher than a benchmark rate called the average prime offer rate.
The Average Prime Offer Rate (APOR) is an annual percentage rate based on average interest rates, fees, and other terms on mortgages being offered to highly qualified borrowers.
Your mortgage will be considered a higher-priced mortgage loan if the APR is a certain percentage higher than the APOR and depends on what types of loans you have:
👉 First-lien mortgages: APR is 1.5 percentage points or more higher than the APOR.
👉 Jumbo Loan: APR is 2.5 percentage points or more higher than the APOR.
👉 Subordinate-lien mortgages (2nd Lien): APR of this mortgage is 3.5 percentage points or more higher than the APOR
Requirements for the HPML Loan
A higher-priced mortgage loan will be more expensive than a mortgage with average terms. Therefore, your lender will have to take extra steps to make sure you can pay your loan back and won’t default. Your lender may have to:
👉 Obtain a full interior appraisal from a licensed or certified appraiser.
👉 Provide a second appraisal of your home for free, if it is a “flipped” home.
👉 In many instances, maintain an escrow account for at least five years.
Statement:
This article was edited and compiled by AAA LENDINGS, the copyright belongs to AAA LENDINGS website, it doesn't represent the position of this website, and is not allowed to be reprinted without permission.
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