What’s Happening With Mortgages?!!
1 Comment Published by Elaine Carlson March 17th, 2008 in Buyer Advice, Financial, Getting a Mortgage, Mortgages, Palos Verdes. by Elaine Carlson
The answer seems to change daily. I checked with a lender today and a 30-year fixed conforming loan (now $729,750 for Palos Verdes Peninsula/South Bay real estate) is 5 3/8% with one loan point while a jumbo loan is 6 1/2% with one loan point. On a jumbo loan, lenders are requiring a minimum of 25% down payment (this is new).
A HUGE caveat on the conforming loans is that if the loan exceeds the original conforming loan limit of $417,000, the borrower would pay an additional 2 loan points on a purchase and an additional 3 loan points on a refinance. It might be cheaper overall to get a jumbo loan of 6 1/2% plus one loan point vs. 5 3/8% and 3 or 4 loan points for loans above $417,000. A borrower can also pay 0 loan points at a higher interest rate.
The news on units is even more ambiguous. Following are old/new conforming amounts for continental United States:
Old Amount New Amount
$417,000 1 unit $729,750
$533,850 2 unit $934,200
$645,300 3 unit $1,125,250
$801,950 4 unit $1,403,400
However, there are currently no guidelines or funding for the new conforming limits and all loans over the old limits will fall under jumbo loan rates/ guidelines.
Rates are extremely volatile (1/2 percent change from Friday to today). As the financial markets continue to settle out, it is more important than ever to speak to a lender (prior to writing an offer on a property) to get the latest rates and requirements as it may impact how you structure your purchase.
View additional charts from HSH Associates Financial Publishers.
No kidding, this market is hugely volatile right now!