Friday, October 03, 2008

Rates and Loan questions

To those of you who asked about rate and loan info, here's the skinny, courtesy of Dana Dukelow at Metrocities Mortgage:

Conforming loans (up to $429k): Even though some lenders are advertising 5% down loans, it is hard to get mortgage insurance for anything under a 10% down. The good news is that today's 30-year fixed rate is running at about 5.875%/1 pt.

Junior jumbo conforming loans (up to $729k): a rate of 6%/1 pt. is possible with A+ credit and 20% down. Less down, less credit is going to be higher.

Jumbo loans (over $729k): these are really hard to get, and fewer and fewer lenders are offering them. And, lenders are frequently asking for 25% down, because this is still considered to be a declining market. However, the way to go seems to be to get a 10/1 arm, or a 5/1 arm -- if you can do it, the rates can be as low as 6%/1 pt.

What I see going forward: I hate to even try to predict it. But, surprisingly, there seems to be liquidity in the home lending system. Unlike, apparently, any other segment of our economy. My hunch is that the powers that be are going to try to shore up the real estate/mortgage system before anything else because that's where the current financial crisis began. So, and this is a guess, I would expect rates to go only slightly higher for conforming and junior loans in the next several months. But honestly, I really have no friggin' idea. I hope that's helpful.


  1. Thanks for answering with a detailed post. So basic Burbank SFRs like the ones you sold recently are going to generally be jr. jumbo, and looks like they need 20%. Who has that saved? The market seems to be locked the savers aren't parting with their hard-earned down, which is preventing mover-uppers from transactions. So its stalemate...

  2. I missed seeing a post related to the half point increase posted this past week...