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I was getting excited about the new conforming limit of $729,750. As I owe $670,000 on my mortgage. I was going to take advantage of this as my intrest rate is at 6.75. But I noticed as soon as the President signed the bill into law the conforming intrest rate started to rise. It was 5.25 before and now is up over 6%. I find this very upsetting. I just feel that lenders are taking advantage of this situation and not passing it onto the consumer. The Gov. did something to stimulate the housing market and it seems like the banks are trying to raise rates closer to what jumbos where at.
Do you think these conforming rates will come down. I would love to get 5.5% when I refinance.

My cedit score is high 750's+
Income $250000+
debt 2 car payments totaling $1100 and no credit card debt.
I live in Orange County Calif. Huntington Beach
House value..??? was $950000 but who knows now.

Please give me any advice

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Cajunhouse,

Welcome to the forum.

No one can predict whether the rates are going to be up or down in future in this uncertain market. But recently rates are going up and it doesn't seem to be coming down in couple of weeks.

I think you credit score is good and you have good income too. So shop a bit for lenders. You may get affordable rate and term.

Feel free to ask if you have any further questions.

Best of luck,
Larry

Posted: Thu Mar 06, 2008 5:57 pm Post subject:

Thanks Larry, I just came off a locked rate for 3 years and it adjusted to 6.75. It does not adjust again until 12-31-2008. So I have some time.

Jessica

Hi Cajunhouse,

Welcome back to our forums.

I suppose you have taken out a hybrid ARM (3/1 year ARM) such that the rate adjusts every year but the initial rate stays fixed for 3 years. Ok, so you are planning to refinance. Now, your credit score is good enough and you don't have too much of debts (not a credit card debt) which is even better.

Currently conforming fixed rate loans are on a drop-down to somewhere above 6% compared to the recent weeks increasing rate trend. Even the 15 year fixed rate loans (popular option for refinancing) fell down to somewhere above 5.5%. The 1 year jumbo ARM fell to somewhere above 5.4% whereas the 5/1 year rates went up close to 5.7%.

Rates on bigger loans are expected to shrink. Since the conforming loan limit has been raised, it is expected that rates for such loans will go down. But right now it's not possible to give the exact figure by which it may go down. You need to keep a watch over the rates every week.

Regards,

Jessica

brad · Posted: Fri Mar 07, 2008 7:00 am Post subject:

Cajunhouse

The mortgage rates are based off of the 10 yr treasury note. The 10 yr is down this morning quite a bit and if you shop for a mortgage today I think you may find a rate under 6%. Keep your eye on the bond market and when you see the bond dip start calling lenders and brokers.

Make sure you call both because your best rates may not come directly from the bank.

shayneroy · Joined: 12 Nov 2007 Posts: 51 21.08 Dollars($)

1. The conforming loan limits are as follows, every thing remains unchanged.

Number of Units v/s Maximum Original Principal Balance
1 $417,000
2 $533,850
3 $645,300
4 $801,950

2. What you feel is incorrect; rates are rising because the global economy is taking off. Forget all the thoughts of drag from concerted tightening by central banks, Europe to top out, America to slide near recession on weak housing and manufacturing, Asian exports to be undercut by American weakness. Lenders are here to business, they are just bounded by the above mentioned issues.

3. As mentioned earlier, the interest rate fluctuations are hard to predict since it depends greatly on the liquidity of the nation and now that the global economy is out almost for a toss, it would be very advisable that you must wait for the rate cut that’s speculated to occur (probably) on 18th of march, if you find that the rate drops down to an extend where you are able to save some money, go ahead and lock the rate because the situation is not getting better as far as at least year 2008 is concerned. You must understand that your loan amount is big and even a 0.5% difference in the interest rate would mean a considerable amount of savings. I must tell you that you are expectations are very high and it’s very unlikely that you could get a 5.5% (unless you choose to buy down)

ckalvesmaki · Posted: Mon Mar 10, 2008 6:58 pm Post subject:

Wow Shayne,

You are totally off base when it comes to what drives interest rates. So let me clarify what determines interest rates.

So basically...What the Fed does ie a rate cut. Will have little to no effect on mortgage interest rates.

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lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

Rates have been on the rise. I would look at locking in a rate with a floatdown so that if rates do go down by some slim chance, then you will be able to get it. I doubt we will see 5.50% again. I wouldn't wait because rates are likely to go higher. They have been going up on a daily basis.

The temporary increase on loan amount will enable many like yourself to get into a low fixed rate that is about 1% lower than a jumbo rate right now.

shayneroy · Joined: 12 Nov 2007 Posts: 51 21.08 Dollars($)

Great "Ctrl-V & Ctrl-C" stuff!
I really appreciate your input and agree to an extent on what you’ve said here. However, I am amazed that an individual having so much of knowledge about the mortgage technicality has failed to understand that the nitigrities of the factors causing the mortgage rates going upwards. I don’t dispute what you have mentioned here (unlike yourself) but I would love to categorize the approach. What you have done here is called “Micro-analysis”. In my case it was “Macro-Analysis” Why? Because I was trying to make Cajunhouse understand – who is certainly not a mortgage professional to understand jargons.

Now, to address your allegation of me being “Completely” off base – I would say, you might want to go back to understand the chain and relating factors that drives the economy and the finances of the nation.

I’m sorry if I sounded sarcastic but you only get back what you give. You should have put your point across in a professional manner instead of being “gung-ho” about ”I know it all”. We would have to understand that we being professionals here, have certainly spent considerable amount of time to understand the industry and bickering is not warranted.

shayneroy · Joined: 12 Nov 2007 Posts: 51 21.08 Dollars($)

My last post was intended for - ckalvesmaki

John1 · Posted: Wed Mar 12, 2008 3:57 pm Post subject:

The new conforming loan limits will be out on monday, 3/17, per one of my lenders. The exact limits hasn't been officially posted, but rumor has it CA will be $729,.. I think Shane is smoking something. Based on his phone number, I'm not a big fan of call center that don't leave messages or people who are dialing for dollars. Mortgage "professionals" develop realtionships with business partners to obtain business, they don't dial for dollars.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi John,

Welcome to the forum.

This is really a great place where you can help people with your sound knowledge and valuable information.

Why don't you introduce yourself at http://www.mortgagefit.com/introduce-yourself.html

Hope you will enjoy participating in this forum.

Best of luck,
Larry

shane · Posted: Mon Mar 24, 2008 4:42 pm Post subject:

Also wanted to add that the "conforming jumbo" and "FHA jumbo" interest rates are in a completely different market. Generally those interest rates are about 1/2% higher than their conforming or normal FHA (that's considered to be $362,790 & below) counterparts. It would've been nice for a $720k loan amount to be at the same interest rate as a $400k loan amount, but alas it is not. It is still plenty better than most lender's jumbo itnerest rates these days, check out most websites and you'll see a standard jumbo interest rate is in the 7's vs. a conforming jumbo is in the mid 6's.

Samantha · Posted: Tue Mar 25, 2008 3:12 am Post subject: RE: jumbo conforming loans

Yes there are new limits for the confirming and jumbo loans, with the latter starting from a loan limit of $729,750. The category of loans between $417,000 and $729,750 called "jumbo conforming" will not be treated as the traditional conforming loans.

The interest rates on the "jumbo conforming" will not be as low as the loans below $417,000. However these won't be as high as that of jumbo loan rates ranging from 7-7.5%.

Some lenders will also be coming up with different strategy. Even some investors will not allow for cash-out refinance or loans on condos. The debt-to-income ratio will be restricted to 45% but for loans under $417,000 require one to have a debt-to-income ratio of 65%.

Mortgages on vacation homes and investment properties will require around 40% down payment. And for those lenders who'll be offering cash-out refinance, it will be limited to $100,000.

Hope this helps...

God bless you.

Samantha

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