Conforming-Jumbos Are Here!

Unfortunately, the current pricing and rates are less than desirable. The simplest way I can explain the pricing and rates is: add 2 points to the price (fee) for the same rate for loans under $417,000 if you aren’t getting any cash-back. Some lenders have a cash-out feature, and for that you will need to add 3 points to the fee. This is definitely a work in progress and we should see some improvements coming down the line. We have already seen some changes since the program was first announced and I expect more/better to come.
The good news is that the Treasury Department has reduced the capital reserve requirements for Freddie and Fannie. As a result, we may see an improving pricing structure in the future. I will post any developments on our web site www.mountaincoast.com as I hear of them.
I’m certain that those who are looking to jump in this housing market, or refinance to try and improve their overall financial health have been following the moves by the Federal Reserve. They have dropped the funds rate to 2.25% in the last 6 months, an unprecedented move in an attempt to keep the economy out of recession. But, like the aforementioned “conforming jumbo”, it still hasn’t trickled down to the consumer side very much yet. Only a few different consumer rates have been affected, some of them being home equity lines of credit (if your lender hasn’t sent you a notice that they are suspending your use of it yet), SOME credit card holders, and coming in the next few months, an improvement in SOME adjustable rate mortgages. Of course don’t get used to those lower rates because as soon as the banks and Wall Street gets healthy again, look for the rates to turn on a dime and head back up.
It is an exciting time to be in the real estate and mortgage business - what is true today may not be tomorrow! However, what IS true today is that fixed rates are exceptionally well priced and those of you that aren’t frozen by uncertainty can find tremendous values in the real estate markets.

Fixed Rates for conforming loans (UNDER $417,000) as of 3/21/08 (a.m.) are:
(rates quoted are for 0 point loans, for 1 point in fee, reduce rate by a ¼ point)
30 year fixed: 5.875% (APR 5.94%) payments are $2,466.71/mo.
15 year fixed: 5.375% (APR 5.49%) payments are $3,379.64/mo.