Dennis' Mortgage Blog

Our real estate market in Southern California appears to be held together almost exclusively by first time home buyers—and we are thankful.  With rates holding steady at resistance levels set in the past year, and the decline in values many families are find now is a great time to buy a home; and they are right.  This strength at the entry level of the market is providing a good foundation for the industry that can hold as the move-up markets slowly begin to come together as well.

Economic news this week showed more inflationary pressure from reports for activity last month; however the significant drop in petroleum prices provides a glimmer of light that the economy may be stabilizing with lower oil costs.  Should this be the case it will ease the Fed’s concern about inflation and decrease the chances of them raising rates at their next meeting, or the one after that.  Bonds reversed themselves this week from the trend they have been following the past several weeks; this week they climbed early in the week and fell late in the week closing on a positive note. 

We are still in a very skittish interest rate environment with big swings; as always my advice:  LOCK!

***ALERT*** Jumbo 30 year fixed rate pricing is not available; the most reasonable quote we have currently from our lenders is 8.5% at cost of 3.5 points.  5/1 and 7/1 ARM pricing is available on loans over $719,000---call for quotes.

NOTE:   We have received heads up that Fannie/Freddie will be adjusting their risk based pricing as early as next week.  Currently many lenders have pricing add-ons for FICOs below 720; we are being told that next week or shortly thereafter this number may move up to 740.  As a result I am changing matrix below to be rates for borrowers with FICOs greater than 740—as always every borrower is different and the numbers quoted in this updates are generic.  All borrowers need to call for interview to receive accurate quote.

NOTE PRICING BELOW IS BASED ON 20% DOWN FOR JUMBO LOANS AND 10% DOWN FOR CONFORMING, 3% FOR FHA, FULL DOC, AND FICOS OF 740 AND ABOVE (change from last Friday):

30 year conventional at 1 point 6.25%              ó  FLAT

30 year conforming-jumbo at 1 point 6.375%            ó  FLAT

30 year FHA at 1 point 6.25%                                    ó  FLAT

30 year jumbo at         NO PRICE CALL FOR INFORMATION              

A word of caution:  buyers/borrowers make sure when you are getting quotes that you are being quoted everything including mortgage insurance premiums if your loan to value exceeds 80% on conventional deals and on all FHA deals.  There are many guideline changes that we have seen affecting condos with low down payments, renting out existing homes and buying new homes, source of funds, debt-to-income ratios, etc; make sure experience is helping you with your loan, not just someone with a low rate quote.

Let me know how my 20+ years of experience can be of assistance to you, your family, friends or co-workers.  It is a great time to buy a new home!

Have a great weekend!

Dennis