There’s lots of noise online about mortgage rates — enough to drive you crazy. “Fannie Mae limits are higher! This means loans will cost less!” “The Fed lowered rates! This means we’re saved!” No it doesn’t. There is a reason investors are willing to offer lower rates to those with good credit, low loan-to-values, and borrowing $417,000 or less. It’s because statistically they are proven to be less risky than larger mortgages. So calling what was a $600,000 jumbo loan last week a “conforming” loan this week doesn’t magically reduce its risk to that of a $417,000 loan. Talking about trying to put lipstick on a pig… The bottom line is that investors will continue to evaluate risk based on loan-to-value, credit scores, and yes, loan amounts. And the loans will be priced accordingly — the Fannie Mae Loan-Level Price Adjustment matrix is what your lenders will be referring to when determining what rates they can offer you. Take a look — you can see how the combination of variables affects your loan price. For example, a borrower with a credit score of less than 620 would be charged 2.75% more than someone with a score of 720 for the same loan if he borrows more than 70% of the home’s value. However, if he borrowed less than 60% there is no surcharge at all. And a borrower taking a “jumbo-conforming” 30 year mortgage pays .25% to .75% more in fees to get the loan. So before you shop, check out the matrix. See yourself from an investor’s point of view and know what to expect when you shop for your loan.