Back in February I added a posting about how federal conforming loan limits were raised from $417,000 to $729,000. This meant that rates for new “jumbo conforming” loans between $417,000 and $729,000 were supposed to drop.  This was good news, but I added the caveat that it would take awhile for lenders to respond to the new conforming limit while they awaited guidelines from Fannie May and Freddie Mac.

It’s taken three months, but lenders are finally offering favorable rates for these larger loans. Last week a mortgage broker I work with placed a $700,000 fixed loan at 5.875%.  I got a quote from another loan professional at 5.625%.  This makes a purchase of a home in San Francisco at our median price of around $750,000 far more affordable.

This doesn’t mean these loans are easy to get– you still need to go ‘full-doc’ (meaning you need to have a job that provides 1040s and pay-stubs), and put at least 10% down. You also need good credit scores– some of my sources say a minimum 660 is required. Others say your scores need to be at least 700.

Call me if you want to crunch the numbers on a purchase and figure out what you can afford. Getting prequalified and understanding how the numbers work on your monthly payment is a critical first step when shopping for a home. 

This entry was posted on Wednesday, May 14th, 2008 at 12:47 pm and is filed under Mortgage Meltdown, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Posted in Mortgage Meltdown, Uncategorized  

Leave a Reply

Name

Mail (will not be published)

Website