We are finally starting to see some relief in loan rates for loans between the old conforming loan amount of $417,000 and the temporary conforming loan limit of up to $729,750 . As part of the economic stimulus package the government raised the conforming loan limit from $417,000 to as high as $729,750 in high cost areas such as Santa Cruz County through the rest of 2008. When this news came out there was a lot of speculation as to whether this would stimulate the housing market or not. A lot of people in the industry and others in the market to purchase celebrated prematurely only to see interest rates that were still in 7-8% range for most loans.
Well, there is now excellent news that lenders are finally starting to see better pricing in what lenders are now calling the agency conforming rates. I have been quoted rates in the low 6% range, which is a huge improvement from pricing just a few weeks ago. Anyone how has been waiting to purchase or re-finance using loan between $417,000- $729,750, and has equity or a down payment, should talk to their banker or mortgage broker and see if now is the right time. Feel free to contact me for a local referral.
Will this stimulate the local market? That is yet to be seen. I imagine that local lenders and mortgage brokers will have a mini boom of re-finances if they have a lot of people sitting on the fence. Lenders are still tough on underwriting guidelines, so it may still be difficult to qualify. Many who bought with little to nothing down may have no equity in their home, and may find it hard to qualify. For others with good credit, verifiable income and equity or a down payment, they should be looking good to lock in a historically low 30 year fixed rate mortgage.