Weekly Lender Update for Boise Idaho & the Treasure Valley- Cheri Ure, Source Mortgage

16 05 2008

Those new jumbo-conforming mortgages, created by Congress to make homes in high-priced areas more affordable, are finally getting cheaper.

Late last week, many lenders slashed their rates by about one-half of a percentage point on jumbo-conforming loans - mortgages between $417,000 and $729,750 that can be guaranteed by Fannie Mae and Freddie Mac.

The rate cut makes them nearly as cheap as standard conforming loans below $417,000.On Monday, the rate on a 30-year fixed-rate jumbo-conforming loan with no points was around 6.125 percent compared with 5.875 percent for standard conforming and 6.75 for regular jumbo loans, according to Julian Hebron, a vice president with RPM Mortgage in San Rafael.

Fannie Mae and Freddie Mac generally require higher credit scores, better income documentation, larger down payments and lower debt-to-income ratios on loans between $417,000 and $729,750 than on smaller loans.

Housing Market Conditions

Existing-home sales are projected to trend up in 2008, with pending home sales showing a slight near-term rise, according to the latest forecast by the National Association of REALTORS^®. However, a recovery for new-home sales is unlikely before 2009.

Lawrence Yun, NAR chief economist, said the worst part of the credit crunch has already worked its way through the data. “The unusual mortgage disruptions that peaked in August were clearly seen in lower home sales that were finalized in September and October, so the market was underperforming. Now that mortgage conditions have improved, some postponed activity should turn up in existing-home sales over the next couple of months” Yun said.”

Existing-home sales are likely to total 5.67 million this year, the fifth highest on record.

If you have any questions regarding current interest rates as well as any mortgage related topics, please feel free to contact Cheri.