The Hidden Fee That Raises Your Mortgage Rate (and How to Avoid It)

Ever wonder why your mortgage rate isn’t the same as what you see online? You click around a few lenders, run a mortgage calculator, and suddenly your “great rate” turns into something higher once your credit score or down payment comes into play. That’s where LLPAs come in.

Loan-Level Price Adjustments, or LLPAs, are behind-the-scenes fees that lenders use to set your rate based on your financial profile. They can make a big difference in what you pay over the life of your loan, but the good news is, once you understand how they work, you can do something about it.

What Is an LLPA?

An LLPA is a small pricing adjustment that reflects the level of risk tied to your mortgage. Every borrower is different, and lenders use LLPAs to fine-tune rates based on factors like credit score, loan type, down payment, and even the kind of home you’re buying.

Think of it like insurance. If something about your loan looks a little riskier, the lender charges slightly more to balance that risk. It doesn’t mean you’re getting a bad deal, just that the rate is being tailored to your unique situation.

What Factors Affect LLPAs?

Several pieces of your financial picture determine how much LLPAs impact you. The most common ones are your credit score and down payment size, but a few others matter too.

• Credit score: The higher your score, the lower your LLPA. If your credit is on the lower side, you’ll likely pay a bit more in interest.

• Down payment: Bigger down payments mean less risk for the lender, which usually leads to better pricing.

• Loan type: Conventional loans often have LLPAs, while government-backed loans like FHA, VA, or USDA loans may have different pricing structures.

• Property type: A second home or investment property might come with higher LLPAs compared to a primary residence.

How LLPAs Affect Your Mortgage Rate

LLPAs don’t show up as a line item on your loan estimate. Instead, they’re built into the rate or added to your upfront costs. A small LLPA could bump your interest rate by a fraction of a percent, which might not sound like much, but over a 30-year loan, it adds up.

This is why two people applying for the same loan amount can get different rates. It’s not about luck—it’s about how their loan features and credit details stack up.

How to Minimize LLPAs and Get the Best Rate

You can’t completely avoid LLPAs, but you can definitely reduce their impact. A few simple moves can save you thousands over time.

Start by improving your credit score before applying, since that’s one of the biggest factors. Aim to pay down credit cards, avoid new debt, and check your report for errors. Also, consider putting a little more money down if possible, because even a small jump in your down payment percentage can lower your pricing.

The best mortgage rates usually come from lenders who are transparent, quick to respond, and willing to explain their numbers. At 14 Days To Close, we value transparency and can show you rates across the board so you can see exactly how everything adds up. We make the process faster by letting you apply anytime—even nights and weekends.

You can explore programs, run your numbers, and get prequalified in minutes at 14DaysToClose.com/prequal.

LLPAs might sound complicated, but they’re just part of how lenders customize your rate. The more you know about how they work, the better positioned you are to get the best possible deal.

At 14 Days To Close, we help you see the full picture upfront—no surprises, no confusion, just real numbers and clear options.