Will St. Patty’s Day Bring Us Luck with Conforming Loan Limits? February 28, 2008
By mid-March, HUD is required to publish what they determine to be median home prices which Fannie Mae and Freddie Mac will be using for what the temporary loan limits will be (125% of the median home price). I’m hopeful that Fannie, Freddie and banks are working dilingently NOW on what the guidelines and pricing will be for this new bracket of loans priced from $417,001 to the new temporary limit and that we’re not waiting after the loan limits are announced for lenders to figure out how they’re going to deal with the new loans.
I’m currently working with a couple who are looking at homes priced around $600,000. They could be perfect candidates for the new conforming loan limit. With 20% down, they will have a loan amount of $480,000. Here are a few scenarios I shared with them:
Structuring the mortgage as a jumbo compared to with a conforming first and second mortgage (heloc):
I am really favoring the 10 year ARM right now. Ten years is a heck of long time. Picture you and your life 10 years ago…and 
try to imagine your life 10 years from now. Mortgage planning is about selecting the right product that suits your long and short term financial pictures. If you select a 30 year fixed mortgage, yet you keep the home for less than 10 years, you may be losing hundreds of dollars every month. With that said, you cannot put a value on “peace of mind”. If you are going to lose sleep at night because you have an adjustable rate mortgage (that is fixed for ten years) then don’t do it. Go for the long term mortgage. Personally, I would lose sleep over not having the long term savings. It is a choice…YOUR choice. BTW…the photo of me might be closer to 13-14 years ago! 
Of course this couple could wait and see what the new loan limits may be…this plan has potential to backfire however. I’m hearing that the add to rate may be anywhere from 0.25% to 1.000% to rate for loans over $417,000. Worse case, the new conforming loan limit would still have rates where our jumbo rates currently are. Plus, we still don’t know what the new limits are. It’s highly speculated that our area will see the limit just shy of $500,000 (speculated being the key word). However if the add to rate is significant enough, then the new limit will make little difference to our current “jumbo” rates.
With the Fed meeting on March 18, 2008 and an anticipated 0.50% rate cut in the works, mortgage rates may very well be higher by that time . The Fed cutting rates typically causes mortgage bonds to react for the worse as it is an inflationary sign. It’s great for your HELOC, not so for your unlocked mortgage rate.
My advise is for my clients to proceed with an approval now. If the new conforming rate proves to be a better scenario for them while we’re in transaction, it’s easy for us to change plans (as long as we’re more than a week from closing).
Sphere: Related ContentFriday’s Rates February 22, 2008
Conforming Rates: based on a sales price of $500,000 with a loan amount of $400,000 and minimum credit score of 680, full-doc mortgage with reserves (taxes and insurance included in the mortgage payments). Rates are priced based on a 45 day lock and are priced with 1 discount/origination point.
30 Year Fixed: 6.000% (APR 6.156%)
15 Year Fixed: 5.375% (APR 5.627%)
10/1 ARM - 5/2/5 Caps: 5.625% (APR 6.503%)
10/1 ARM Interest Only - 5/2/5/ Caps: 5.625% (6.541%)
7/1 ARM - 5/2/5 Caps: 5.125% (APR 6.551%)
FHA/VA 30 Year Fixed: 6.125% (APR 6.654%)
Jumbo (Non-Conforming Rates). Pricing based on purchase with 20% down and minimum loan amount of $417,001 with a minimum credit score of 680, full document loan with reserves and a 45 day lock.
30 Year Fixed: 6.875% (APR 7.020%)
10/1 ARM: 6.125% (APR 6.805%)
10/1 ARM Interest Only: 6.750% (APR 7.230%)
7/1 ARM Interest Only: 6.375% (APR 7.205%)
5/1 ARM: 5.500% (APR 7.036%)
Prime Rate (what HELOCs are based on): 6.000%
Rates are as of Friday, February 22, 2008 at 3:00 p.m. This is not a guarantee nor is it a commitment to interest rate. For your personal rate quote or for loan amounts over $650,000; please contact your Mortgage Professional.
Sphere: Related ContentMortgage rates heading up February 15, 2008
Mortgage rates continue their trend upward and they don’t look like they’re coming back down soon. This market is still very volatile and as I always, I encourage you to lock and not float your interest rates if you a closing within the next 4-6 weeks. If you’re hunkering for more updates on the market than what I post here every Friday, you can follow me with my updates on Twitter.
The conforming loan limit is still $417,000. HUD has less than a month to publish what the values are for specific areas that the temporary conforming limit will be. The figure that is being whispered for the tri-county area is around $493,000. Count on Fannie and Freddie having an add to rate for loans from $417,001 - $[the tempoary loan limit]. This add could be anywhere from 0.25% to 1.00% to RATE. With FHA loan limits also being increased, FHA insured loans could become “the new jumbo”. Bottom line, we won’t know until this information is published and made available. At this point, there is a lot of speculation. If you have a potential mortgage with a possible loan amount from $417,001-$493,000; it may or may not be worth waiting for the loan limit to lifted.
Conforming Mortgage Rates (for the criteria I used to price these rates, check out last Friday’s rate post):
30 Year Fixed: 5.875% (APR 6.109%)
15 Year Fixed: 5.125% (APR 5.357%)
10/1 ARM Interest Only: 5.375% (APR 6.381%)
7/1 ARM: 5.000% (APR 6.479%)
5/1 ARM: 4.875% (APR 6.746%)
FHA/VA 30 Year Fixed: 6.000% (APR 6.529%)
Jumbo (Non-Conforming) Rates. For pricing criteria, please review the jumbo rate section from last Friday’s rates.
30 Year Fixed: 6.625% (APR 6.774%)
10/1 ARM Interest Only: 5.875% (APR 6.682%)
7/1 ARM: 5.375% (APR 6.659%)
Prime Rate (what HELOCs are based on): 6.00%
This is just a small sample of available rates and products for consumers with a minimum mid-credit score of 680, going full-doc with 20% down for a home purchase. The above rates are priced with 1 point and are based on a 45 day lock. Rates are as of Friday, February 15, 2008 at 12:00 p.m. This is not a guarantee nor is it a commitment of interest rate. For your personal rate quote or for loan amounts over $650,000 please contact a Mortgage Professional.
Sphere: Related ContentFriday’s Rates February 8, 2008
We are closer to the conforming loan limits being increased through the end of 2008. After President Bush signs HR 5140 into law, HUD will have 30 days to publish what will be used for median home prices. The temporary conforming limits will be based on 125% of the median home price.
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied, “full doc” purchase with minimum credit scores of 680 with an 80% loan to value or lower, a loan amount of $400,000, and with reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below.
30 Year Fixed: 5.500% (APR 5.640%).
30 Year Fixed with 10 Year Interest Only: 5.875% (APR 6.004%).
15 Year Fixed: 4.875% (APR 5.104%).
7/1 ARM (5/2/5 caps - 2.25 margin): 4.875% (APR 6.427%).
7/1 ARM 10 Year Interest Only Payments (5/2/5 caps - 2.25 margin): 5.125% (APR 6.601%).
FHA/VA 30 Year Fixed: 5.750% (APR 6.279%)
JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).
30 Year Fixed: 6.375% (APR 6.530%). Payment per $1000 = $6.24.
30 Year Fixed with 10 Year Interest Only Payments: 6.750% (APR 6.901%).
7/1 ARM (5/2/5 caps - 2.25 margin): 5.250% (APR 6.599%).
7/1 ARM Interest Only: 5.375% (APR 6.725%).
Prime Rate (what HELOCs are based on): 6.00%
Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR. This is just a small sample available of rates and products. Rates are as of Friday, February 8, 2008 at 3:00 p.m. and may change at any time. Available programs may change at anytime as well. This is not a guarantee nor is it a commitment of interest rate. For your personal rate quote or for loan amounts over $650,000, please contact me.
Sphere: Related ContentFriday’s Rates February 1, 2008
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied, “full doc” purchase with a minimum credit scores of 680 with an 80% loan to value or lower, a loan amount of $400,000, and with reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below.
30 Year Fixed: 5.375% (APR 5.533%). Payment per $1000 = $5.60.
30 Year Fixed with 10 Year Interest Only: 5.750% (APR 6.866%). Payment per $1000 = $4.79.
40 Year Fixed: 5.750% (APR 5.878%). Payment per $1000 = $5.33.
7/1 ARM (5/2/5 caps - 2.25 margin): 4.875% (APR 5.878%). Payment per $1000 = $5.33.
7/1 ARM 10 Year Interest Only Payments (5/2/5 caps - 2.25 margin): 5.000% (APR 6.522%). Payment per $1000 = $4.17.
FHA/VA 30 Year Fixed: 5.625% (APR 6.154%). Payment per $1000 = $5.76. (not factoring upfront or monthly MI for FHA).
JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).
30 Year Fixed: 6.500% (APR 6.657%). Payment per $1000 = $6.32.
30 Year Fixed with 10 Year Interest Only Payments: 6.625% (APR 6.769%). Payment per $1000 = $5.52.
5/1 ARM - 5/2/5 caps - 2.25 margin: 5.500% (APR 6.995%). Payment per $1000 = $5.68.
5/1 ARM Interest Only - 5/2/5 caps - 2.25 margin: 5.500% (APR 7.063%). Payment per $1000 = $4.58.
Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR. This is just a small sample available of rates and products. Rates are as of Friday, February 1, 2008 at 2:00 p.m. and may change at any time. Available programs may change at anytime as well. This is not a guarantee nor is it a commitment of interest rate. For your personal rate quote or for loan amounts over $650,000, please contact me.
Sphere: Related ContentFriday’s Rates: 30 Year returns to the Mid to Low 5’s January 25, 2008
T.G.I.F! Mortgage interest rates have improved slightly since this morning by 0.125% across the board. Jumbo rates jumped up significantly on Wednesday. And as if this week didn’t provide enough drama, next week is packed with events that assures another volatile ride with mortgage interest rates. As always, I strongly recommend locking. In this market, rates may change as soon as I’ve posted them (one lender I work with provided 6 rate sheets on Wednesday alone).
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied, “full doc” purchase with a minimum credit scores of 680 with an 80% loan to value or lower, a loan amount of $400,000, and with reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below.
30 Year Fixed: 5.375% (APR 5.533%). Payment per $1000 = $5.60.
30 Year Fixed with 10 Year Interest Only: 5.750% (APR 6.866%). Payment per $1000 = $4.79.
40 Year Fixed: 5.875% (APR 6.005%). Payment per $1000 = $5.42.
7/1 ARM (5/2/5 caps - 2.25 margin): 5.000% (APR 6.481%). Payment per $1000 = $5.37.
7/1 ARM 10 Year Interest Only Payments (5/2/5 caps - 2.25 margin): 5.125% (APR 6.603%). Payment per $1000 = $4.27.
FHA/VA 30 Year Fixed: 5.750% (APR 6.279%). Payment per $1000 = $5.84. (not factoring upfront or monthly MI for FHA).
JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).
30 Year Fixed: 6.625% (APR 6.782%). Payment per $1000 = $6.40.
30 Year Fixed with 10 Year Interest Only Payments: 6.750% (APR 6.894%). Payment per $1000 = $5.63.
7/1 ARM - 5/2/5 caps - 2.25 margin: 5.250% (APR 6.606%). Payment per $1000 = $4.38.
7/1 ARM Interest Only - 5/2/5 caps - 2.25 margin: 5.375% (APR 6.721%). Payment per $1000 = $4.48.
Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR. This is just a small sample available of rates and products. Rates are as of Friday, January 25, 2008 at 12:00 p.m. and may change at any time. Available programs may change at anytime as well. This is not a guarantee nor is it a commitment of interest rate. For your personal rate quote or for loan amounts over $650,000, please contact me.
Sphere: Related ContentMortgage Rates for Friday: ARMs and Jumbo’s MUCH Lower! January 11, 2008
Mortgage guidelines continue to tighten. Most recently, I’m seeing some lenders extend credit score-risk based pricing to FHA and VA mortgages. Second mortgages have increased credit score requirements and have pulled back the total loan to value they will lend. If you are putting less than 30% down and are considering obtaining a mortgage in the next year, I encourage you to contact your Mortgage Professional sooner than later. Mortgage rates continue to be volatile. Although the rates I’m posting today appear close to last week’s posted rates, they’ve been bumping around all week. I favor locking over floating. And why not? Rates are great!
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied, “full doc” with minimum credit scores of 680 with an 80% loan to value or lower, a loan amount of $400,000, and with reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below.
30 Year Fixed: 5.500% (APR 5.649%). Payment per $1000 = $5.68.
30 Year Fixed with 10 Year Interest Only: 5.875% (APR 6.029%). Payment per $1000 = $4.90.
40 Year Fixed: 6.125% (APR 6.252%). Payment per $1000 = $5.56.
5/1 ARM (5/2/5 caps - 2.25 margin): 5.125% (APR 6.853%). Payment per $1000 = $5.44.
5/1 ARM 10 Year Interest Only Payments (5/2/5 caps - 2.25 margin): 5.125% (APR 6.903%). Payment per $1000 = $4.48.
FHA/VA 30 Year Fixed: 5.750% (APR 6.279%). Payment per $1000 = $5.84. (not factoring upfront or monthly MI for FHA).
JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down). Since jumbo 7 year ARMs are right in there with the 5 year ARM, I’ve swapped the programs to buy you 2 more years of the fixed period.
30 Year Fixed: 6.250% (APR 6.403%). Payment per $1000 = $6.16.
30 Year Fixed with 10 Year Interest Only Payments: 6.375% (APR 6.515%). Payment per $1000 = $5.31.
7/1 ARM - 5/2/5 caps - 2.25 margin: 5.375% (APR 6.670%). Payment per $1000 = $5.60.
7/1 ARM Interest Only - 5/2/5 caps - 2.25 margin: 5.500% (APR 6.781%). Payment per $1000 = $4.58.
Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR. This is just a small sample available of rates and products. Rates are as of Friday, January 11, 2008 at 10:00 a.m. and may change at any time. Available programs may change at anytime as well. This is not a guarantee nor is it a commitment of interest rate. For your personal rate quote or for loan amounts over $650,000, please contact me.
Sphere: Related ContentRing in the New Year with Lower Mortgage Rates January 4, 2008
The much weaker than expected Jobs Report and unemployment figures at a two year high find mortgage rates benefiting from investors seeking the safety of bonds. This “bad news” could be a great opportunity for those who are considering refinancing or buying a home. Mortgage rates have improved from 0.25% - 0.375% to rate while stocks fall hard on worries of a recession.
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied, “full doc” with minimum credit scores of 680 with an 80% loan to value or lower, a loan amount of $400,000, and with reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below.
30 Year Fixed: 5.500% (APR 5.649%). Payment per $1000 = $5.68. (0.375% improvement).
30 Year Fixed with 10 Year Interest Only: 5.875% (APR 6.029%). Payment per $1000 = $4.90. (0.250% improvement).
40 Year Fixed: 6.000% (APR 6.132%). Payment per $1000 = $5.50. (0.375% improvement).
5/1 ARM (5/2/5 caps): 5.250% (APR 5.396%). Payment per $1000 = $5.52. (0.375% improvement).
5/1 ARM 10 Year Interest Only Payments: 5.375% (APR 5.552%). Payment per $1000 = $4.48. (0.375% improvement).
FHA/VA 30 Year Fixed: 5.875% (APR 6.529%). Payment per $1000 = $5.92. (not including MI for FHA). (0.25% improvement).
JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).
30 Year Fixed: 6.500% (APR 6.657%). Payment per $1000 = $6.32. (0.25% improvement).
30 Year Fixed with 10 Year Interest Only Payments: 6.625% (APR 6.783%). Payment per $1000 = $5.52. (0.25% improvement).
5/1 ARM 5/2/5 caps: 6.125% (APR 6.277%). Payment per $1000 = $6.08. (0.25% improvement).
5/1 ARM Interest Only: 6.125% (APR 6.277%). Payment per $1000 = $5.10. (0.25% improvement).
Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR. This is just a small sample available of rates and products. Rates are as of Friday, January 4, 2008 at 12:30 p.m. and may change at any time. Available programs may change at anytime as well. This is not a guarantee nor is it a commitment of interest rate. For your personal rate quote or for loan amounts over $650,000, please contact me.
Sphere: Related ContentMortgage Interest Rates on the rise December 21, 2007
Mortgage interest rates continue their journey upwards after the release of the PCE (Personal Consumption Expenditure) coming in higher than expected at 2.2%. The Fed prefers to see this index at no higher than 2%. As this economic indicator is pointing towards inflation. At this time, it is likely the Fed will be forced to lower rates when they meet in January. If you’ve been following the rate posts, you know that inflation is the arch enemy of bonds. Since mortgage interest rates are based on mortgage backed securities (bonds), mortgage rates are dramatically increasin. The 30 year fixed conforming is up over 1% in fee in one day (the same rate yesterday cost you an additional 1% of your loan amount) or 0.25% in rate.
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied, “full doc” with minimum credit scores of 680 with an 80% loan to value or lower. Rates are based on loan amount of $400,000 without having the reserve account (taxes and insurance) waived. Rates quoted are priced based on a 45 day lock with 1 point (discount or origination; 1% of your loan amount cost the same and buys you the same rate). There are no prepayment penalties on any of the rates quoted below.
30 Year Fixed: 5.875% (APR 6.021%). Payment per $1000 = $5.92.
30 Year Fixed with 10 Year Interest Only: 6.250% (APR 6.381%). Payment per $1000 = $5.21.
40 Year Fixed: 6.625% (APR 6.766%). Payment per $1000 = $5.94.
5/1 ARM (2/2/6 caps): 5.750% (APR 5.886%). Payment per $1000 = $5.84.
5/1 ARM 10 Year Interest Only Payments: 5.875% (APR 6.011%). Payment per $1000 = $4.90.
FHA/VA 30 Year Fixed: 6.250% (APR 6.904%). Payment per $1000 = $6.16. (not including MI for FHA).
JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).
30 Year Fixed: 6.750% (APR 6.901%). Payment per $1000 = $6.49.
30 Year Fixed with 10 Year Interest Only Payments: 6.875% (APR 7.027%). Payment per $1000 = $5.73.
5/1 ARM: 6.500% (APR 6.647%). Payment per $1000 = $6.32.
5/1 ARM Interest Only: 6.625% (APR 6.647%). Payment per $1000 = $5.52.
This is just a small sample available of rates and products. Rates are as of Friday, December 21, 2007 at 11:30 a.m. and may change at any time. Available programs may change at anytime as well. This is not a guarantee nor is it a commitment of interest rate. For your personal rate quote or for loan amounts over $650,000, please contact me.
Sphere: Related ContentFriday’s Mortgage Interest Rates December 14, 2007
Earlier this week I told you about how Fannie and Freddie are increasing the cost of mortgages for anyone with credit scores under 680 using less than 30% down. This impacts A LOT of people. Since I posted that article, I have received many memos from some lenders saying that they are implementing this pricing immediately instead of waiting until March 1, 2008.
Please do use my rates as a guide to help make sure you are receiving competitive pricing. With different lenders reacting to the guidelines changes at different times, you may wind up with a higher rate because (1) that’s all your lender can provide; or (2) your Loan Originator (or their company) is making a handsome profit on the back-end of the loan if they still have the better pricing available.
Mortgage interest rates are continuing to trend upwards on the heals of the just released Consumer Price Index (CPI) showing higher than expected inflation and the Feds actions on Tuesday. Inflation is the arch enemy to bonds and the market is reacting accordingly. Conforming 30 year fixed rates are up approx. 0.375% in rate (or 1.2% in fee) from November 30’s low of 5.625%. As always, I recommend locking your mortgage interest rate if you’re closing before 60 days.
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied, “full doc” with minimum credit scores of 680 with an 80% loan to value or lower and a loan amount of $400,000. Rates quoted are priced based on a 45 day lock with 1 point (discount or origination; 1% of your loan amount cost the same and buys you the same rate). There are no prepayment penalties on any of the rates quoted below.
30 Year Fixed: 5.990% (APR 6.127%). Payment per $1000 = $5.99.
30 Year Fixed with 10 Year Interest Only: 6.375% (APR 6.515%). Payment per $1000 = $5.31.
40 Year Fixed: 6.500% (APR 6.641%). Payment per $1000 = $5.68. (0.125% increase)
5/1 ARM (2/2/6 caps): 5.750% (APR 5.886%). Payment per $1000 = $5.84.
5/1 ARM 10 Year Interest Only Payments: 5.875% (APR 6.011%). Payment per $1000 = $4.90.
FHA/VA 30 Year Fixed: 6.250% (APR 6.904%). Payment per $1000 = $6.16. (not including MI for FHA).
JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).
30 Year Fixed: 6.750% (APR 6.901%). Payment per $1000 = $6.49.
30 Year Fixed with 10 Year Interest Only Payments: 6.875% (APR 7.027%). Payment per $1000 = $5.73.
5/1 ARM: 6.375% (APR 6.522%). Payment per $1000 = $6.24.
5/1 ARM Interest Only: 6.375% (APR 6.522%). Payment per $1000 = $5.31.
This is just a small sample available of rates and products. Rates are as of Friday, December 14, 2007 at 9:00 a.m. and may change at any time. Available programs may change at anytime as well. This is not a guarantee nor is it a commitment of interest rate. For your personal rate quote or for loan amounts over $650,000, please contact me.
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