Mortgage Pricing Adjustments
Each rate sheet will have three main sections along with basic guidelines. The left hand margin will have loan programs and rate 
boxes corresponding to each program. Below the title will be listed the rates and corresponding rebates. There is another section titled Adjustments to fee where you will find LTV percentage tiers. Each has their own format.
Below these tiers there will be given a variety of adjustment descriptions. If you carefully examine this section you will know where you are taken for a ride and where the bank is really helping in analyzing your loan situation. All these work as incentives on you LTV and personal loan scenario. The negative pricing incentive works as money-back to the borrower, lender or bank. The more negatives the better.
From bank to bank these pricing adjustments and guidelines differ. But there will always be pricing for these eight key factors which are property type, loan amount, documentation (full, limited, or stated), FICO score, Occupancy, Loan to value/combined loan to value, Debt to income ratio and loan purpose (purchase or refinance).
The most common pricing adjustment is based on loan amount. Conforming loans are offered lower rates by most banks and lenders. But for an amount of more than $1 million the pricing adjustment is hefty.
The other typical pricing adjustment is based on credit score which takes varies your rate with few points higher or lower depending on your score.
Property types are also considered important for pricing adjustments. Residential properties are allowed to have up to 4 points getting a hit. High rise condos take a larger hit. The property type and occupancy are the biggest adjustments which can affect your mortgage rate. Not to forget, occupancy frauds are in large numbers. There are three different types in this which are Primary residence, 2nd home/vacation home and investment property.
Transaction type does affect your pricing adjustment. Here are the three different types of mortgage transactions which are Purchases, Rate and Term Refinances and Cash-out Refinances.
Documentation type is one of the eight factors that greatly determine your interest rate and the mortgage plan you are eligible for. To avoid fraudulence a variety of documentation types have come into place which are full doc/limited doc, 12 months bank statements, 6 months bank statements, state-income-verified-assets (SIVA), no ratio, stated income stated assets (SISA), No income no asset (NINA) and no doc.
No doc is the easiest method to secure a loan. There are no documents to be submitted like assets, state income, or employment. It is a great time saver and hassle free. The decision to finance is based solely on property value and the credit history. Higher LTV’s have large adjustment cost which seems to be the only drawback.
The flexibility offered by small adjustments is worth an option to be considered. To enjoy certain benefits of an interest-only option and impounded account you may have to shell some nominal amount. Most of these pricing adjustments will affect you par rate.