United Wholesale Mortgage (UWM) is making waves in the mortgage industry with a bold new move that promises to shake up the government loan market. On November 27, 2024, UWM announced it will remove all loan-level pricing adjustments (LLPAs) for government-backed loans—a decision aimed at making homeownership more affordable for borrowers with FICO scores of 600 or higher. This game-changing initiative is available until March 31, 2025, and is set to boost buyers’ purchasing power by up to 150 basis points.
What does this mean for borrowers?
For starters, it means fewer upfront costs for those who typically face the steepest fees on loans. Whether you’re looking for a Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA), or U.S. Department of Agriculture (USDA) loan, this move gives you the chance to access better pricing, lower your interest rate, or potentially afford a more expensive home.
LLPAs are essentially fees that lenders charge based on a borrower’s risk level, impacting how much a mortgage will cost. Lower-risk borrowers often pay less, while higher-risk borrowers face more expensive adjustments. UWM’s bold decision to eliminate these risk-based charges is a win for those who need it most, particularly in the government-backed loan space where LLPAs are not typically applied by the agencies themselves.
A Strategic Shift Toward Government Loans
UWM is increasingly betting on the growth of government loans, which now account for a larger share of its total volume. In Q3 of 2024, 41% of UWM’s loan production came from government-backed mortgages, up from 32% earlier in the year. With $39.5 billion in mortgage originations during this period, the company is making a serious push to dominate this segment.
This move follows UWM’s impressive track record as the second-largest U.S. producer of government loans from January to September 2024, originating $37.1 billion—a 39.5% year-over-year increase. UWM’s market share is growing fast, with only Freedom Mortgage ahead in the rankings.
Refinance Opportunities on the Horizon
UWM isn’t stopping with just government loans. The company is also positioning itself to capitalize on potential mortgage rate drops with a new cash-out refinance product. As rates fluctuate, this product offers up to 89.99% loan-to-value and eliminates the need for mortgage insurance—making refinancing more accessible than ever.
Plus, UWM has extended its 75-basis-point incentive for conforming conventional and government-backed refinances through November 29, 2024, creating even more opportunities for borrowers to save or upgrade their mortgages.
How to Take Advantage of This Offer
To take advantage of these new benefits and secure a government-backed loan with no LLPAs, borrowers will need to work through one of UWM’s business partners—UWM does not work directly with consumers. One of UWM’s trusted partners is Klick Mortgage, which is authorized to offer these government-backed loan products. If you’re looking to benefit from these reduced pricing adjustments and explore your mortgage options, reach out to Klick Mortgage to get started.
In short, UWM is playing it smart, giving brokers and borrowers a competitive edge while keeping its sights set on long-term growth in the government loan space. Whether you’re buying your first home or refinancing, UWM, through partners like Klick Mortgage, is making it easier to get into the market, and this is just the beginning.
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