|
Many CA homes require Jumbo Mortgages. |
.jpg)
Despite unprecedented tax credits for first time home buyers the LA housing market remains stagnant. Refinancing is showing signs of life with long term mortgage rates on loans insured by Fannie Mae and Freddie Mac holding steady in the low 5% range.
To purchase a home in California record low rates may not apply. Jumbo Mortgage Rates have improved slightly in the past few weeks but remain higher than conforming loans. Jumbo mortgage loans go beyond the limits of conforming mortgages insured by Fannie Mae and Freddie Mac. The maximum loan amount of $417,000 for a single family residence is quite often below the amount needed in California. There is a conforming jumbo which was created for higher end areas and goes up to about $729,000 in some counties; however, conforming jumbo loans are extremely hard to qualify for. True jumbo mortgages by private lenders make the higher end housing market move.
Before the housing market collapse the difference between true jumbo rates and conforming mortgage rates averaged about 0.25%. Today, the difference is tremendous, over 2%. Without good old portfolio lenders like World Savings and Downey Savings jumbo loan availability has dwindled. The risk involved dries the ink out of underwriter's approval stamps fearful a bad loan could come back and cost them their job. Jumbo mortgage loans were considered high risk previous to the market collapsing and now that risk has been magnified by 10.
Banks continue to gain cash as scared investors put what's left of their money into FDIC insured savings accounts. Understandably credit remains super tight in the high risk financing world of jumbo home loans. The rise in refinance applications on conforming mortgages is a result of lower interest rates. The traffic jam in the jumbo mortgage market is a result of higher interest rates. We can only hope soon relief comes to those in need of a jumbo mortgage refinance or in search of a jumbo purchase loan.
Other notes: My research into mortgage net branch programs still determines the best is Supreme Lending. FreeRateUpdate.com now offers a free mortgage rate widget so if you have a website you can display mortgage rates free to your visitors.
Comments
LA is a tough market because all of the houses are so over priced. I recently dealt with www.MortgageRefinancing.com and they were really helpful. Essentially what they told me was in the jumbo market the ARMs were the most competitive mortgage product. 30y fixed were over priced. I got a 5 year ARM and I think I am getting a good deal. I have no clue where LA property values will go but hopefully this is the bottom.
This whole stimulus package is just part of the governments long term plan to take away the power of the people. Are we going to do something about it or be lazy and think someone else is going to do it for us? It is time for a revolution. We need to overthrow the government and take our power back. Before there is nothing we can do about it.. you should check www.obamamortgage2009.blogspot.com/2009/03/obamas-mortgage-modification-do-you.html#comments
Got something to say?
Examiner.com is looking for writers, photographers, and videographers to join the fastest growing group of local insiders. If you are interested in growing your online rep apply to be an Examiner today!