What happens if a borrower has a higher loan level price adjustment?

When a borrower has a higher loan level price adjustment, this typically indicates that the lender is assessing a greater risk associated with that particular loan. Loan level price adjustments are fees added to the interest rate or the pricing of a loan based on various risk factors, such as credit score, loan-to-value ratio, and other borrower characteristics.

Higher loan level price adjustments often result in higher interest rates being charged to the borrower. This reflects the lender's need to mitigate the increased risk presented by the borrower, making higher rates a common consequence. By paying a higher interest rate, the borrower effectively compensates the lender for the added risk associated with their loan profile.

In contrast, the other choices do not accurately reflect the implications of a higher loan level price adjustment. Lower closing costs and adjustments to the loan amount are not typically outcomes of increased risk; instead, they would more likely occur in scenarios where the borrower presents lower risk. Additionally, purchasing more insurance is a separate concern and not a direct result of the pricing adjustments in the context of loan level pricing.