SACRAMENTO MORTGAGE UPDATE

You know those headline mortgage rates you see advertised?  They are becoming more elusive each week.  While rumors still circulate about the coming of 3 & 4% mortgage rates, don’t bet on it.  More importantly, don’t wait.   Last week’s spate of bad economic reports did little to help rates, and while Freddie Mac’s Primary Mortgage Market Survey yesterday reported a weekly average of 5.11% at .7 points, Freddie also noted the reversal of the recent downward trend.

To further complicate the picture in ways indecipherable to the general public, Fannie Mae and Freddie Mac rolled out new Loan Level Price Adjustments this week.  Refer to by mortgage professionals as “ads” or “hits” (to the rate), these new adjustments harshly penalize investors, home owners seeking cash-out refinances, and anyone with a sub-740 Fico score.

Also, the new High Balance Conforming loans–those lying between $417k and $475k–have even harsher adjustments.  So while these “jumbo conforming” loans offer rates much lower than the regular jumbo loans, they have guidelines that are squeaky tight when compared to sub- $417k conforming loans.

Get pre-approved well in advance of writing an offer so that you know the water temp before you dive in.  And if you’re refinancing, have us do some homework to make the equity is there to complete the loan before you spend money on the appraisal.