What is the APR threshold for a high-cost home loan for a 1st lien?

For a first lien high-cost home loan, the APR threshold is set at 6.5%. This standard is designed to protect consumers from predatory lending practices and ensures that loans with higher costs are subject to additional regulations and disclosures. A loan is considered high-cost if its APR exceeds the established threshold, indicating that it presents a greater risk of financial hardship to consumers. This threshold is particularly important as it helps borrowers understand the financial implications of their loan terms and promotes transparent lending practices.

This 6.5% APR threshold is also consistent with various regulatory guidelines that aim to regulate high-cost loans, including those laid out in the Home Ownership and Equity Protection Act (HOEPA). Understanding this threshold is essential for mortgage loan originators in South Carolina, as it affects compliance and the way loans are structured and marketed to borrowers.