by admin | Thursday, 25 August, 2011
Eric Nelson of Silicon Valley Funding writes:
In 2008, as a response to the collapse of the mortgage market, federal regulators created a new category of mortgage, the high-balance conforming loan. Since that time, loans have been available up to $729,750 in high-cost areas at rates lower than those for full “Jumbo” mortgages.
Conforming loans are those that have a loan balance under $417,000 which can be re-sold by an originating lender on the Fannie Mae and Freddie Mac federally sponsored mortgage markets. This allows the lender to re-lend the same funds over and over again and is important to the liquidity of the lending market. The high balance conforming limits applies to mortgages between $417,001 and $729,750. This program was created to support the economy by assisting high-balance borrowers during the financial crisis and was temporary.
Starting October 1, 2011, the high balance conforming loan limit will drop to $625,500. This in turn means that interest rates on these loan amounts between $625,500 and $729,750 will be HIGHER starting October 1, since they will no longer be backed by the government. After October 1, any mortgage over $625,500 will officially be a “Jumbo.”
Interest rates this week are among the lowest we’ve seen in 2011 and it is not expected that the federal government will extend the high balance conforming loans up to the $729,750 level again in the near future. Fixed rate loans have seen the largest drop and are currently the lowest interest rates we have had in the past 40 years.
If you are planning a purchase or refinance and you will need a loan amount between $625,500 and $729,750 you should get the process started immediately.
Eric can be reached at eric@svcfunding.com and 408-268-2442, and has been helping people finance their homes since 1987.
by admin | Sunday, 6 February, 2011
Julian Hebron of RPM Mortgage has writes in his blog The Basis Point, as have many others recently that rates are going to go up in 2011. But the difference is that he presents an excellent, easy to understand history and analysis of why.
Rates are expected to go up by about .75% by the end of 2011. This translates to about $450 a month difference in interest payments on a $729000 high balance conforming mortgage and $260 a month difference on a conforming loan of $417000. So if you are thinking of buying or refinancing, the potential for imminent rate increases are worth taking into account in your plans.
Julian writes, “Before presenting rate predictions for 2011, it’s worth noting that all forecasts are subject to the whims of highly volatile rate markets. What follows is an explanation of how rate markets work, how rates have behaved since the financial crisis began in 2007, then the outlook for this year.”
Read more on The Basis Point
by admin | Friday, 19 November, 2010
Just received breaking news from Mortgage Banker Susan Reber at Mission Hills!
High balance through September 2011. This is wonderful news as it will allow refinances of loans in San Francisco County up to $729k to be federally backed through that date. It also allows buyers to use FHA loans with as little as 3.5% down up to that amount – even for refinances.
To see the press release from the Federal Housing Finance Agency, please click here.
Susan is an expert on all loans government backed (and lots else besides). If you want to reach Susan, click here.
by admin | Saturday, 27 March, 2010
“No!” you say. ”Impossible!” Well, apparently, it can be done. Even if you haven’t missed payments or aren’t in financial trouble. If you are one of the millions of people who are both underwater and have a really unattractive loan, the HARP program may be able to help. I know just a few of the details (like your loan must be owned by Fannie Mae or Freddie Mac), but Eric Nelson of Silicon Valley Funding knows them all. If you or a loved one find yourself in this situation, shoot him an email and see if he can help. If you just want to read up on it, click here.
by admin | Tuesday, 3 February, 2009
It is a courageous person who would predict the future right now. Eric Nelson, a great mortgage broker with over 20 years of experience, is such a man. He can be reached at enelson@thehontegroup.com. Read on . . .
“IT’S A CRUEL, CRUEL SUMMER…LEAVING ME HERE ON MY OWN.” From 80′s band Bananarama And that’s exactly what potential home buyers and refinancers who stay on the sidelines might be singing.
Although home loan rates are very attractive now, the picture could be quite different as some inflationary factors will likely come to light heading into summer. Oil prices may be on the rise as we approach the summer driving season, some of the economic stimulus might begin to take hold, corporate cost-cutting measures could start to bear fruit, and, perhaps most importantly, the Fed will no longer be a buyer of Mortgage Bonds. These are all ingredients in a recipe that could very easily result in significantly higher interest rates this summer…so if you have been thinking about acting on a home loan, do not delay.
But with no hint of inflation in the current market, why would Bond traders be fearful now? Are they listening to strange voices and what did they say? The forward looking markets got an earful from Fed Governor Frederic Mishkin last week…and he’s not the only one. Mishkin said that “inflation could come to the forefront, given all of the government programs”, and “once the economy recovers, liquidity must be taken out of the markets”…meaning the Fed may need to rapidly hike rates down the road, to control the potential of inflation.
What this means is that if you are thinking of refinancing, get your application in as soon as you can, so that when the right rate pops up, your lender can lock you in and make sure you take advantage of this opportunity. If you are thinking of buying right now, the low interest rates (and home prices) available right now may help you buy a home that was out of reach for you just a few months ago. If you are considering your options, I want to help. Give me a call (or send an email) and let’s get started helping you make your next move.
