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.
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