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New Conforming Loan Limits are In
March 20th, 2008 categories: Real Estate Finance
As of April 1st, most lenders will be honoring the new Fannie Mae/Freddie Mac limits. Several lenders are already recognizing the new limits. For borrowers who are ready to purchase or refinance, there is the opportunity to lock in an interest rate and program ahead of the April 1st deadline.
Interest rates moved down noticeably on Monday of this week. The Federal Reserve lowered the Discount Rate 0.25% over the weekend – the first time they have made a weekend announcement in 30 years. On Tuesday, the Federal Reserve again lowered both the Discount rate and the Fed Funds rate 0.75%. In response, mortgage rates actually moved higher as bond investors fear inflation and de-valuation of the U.S. Dollar.
We have seen over $400 billion dollars of liquidity injected into the market in the last few weeks. Most likely, this extra liquidity will help ease mortgage rates and many analysts expect we will see interest rates drop in the next few weeks.
Lending guidelines continue to contract. However, there are lender nitches here and there to help borrowers realize the lowest possible rate. I have been getting a lot of calls lately from borrowers who need stated income guidelines and have had trouble getting qualified.
There are loans available for stated income borrowers, but you need to know where to find them. While many stated income loans have been removed or restricted, there are several lenders who offer an attractive alternative to clients who need stated income guidelines, but have good credit and savings.
Lenders love money in the bank. They look at assets, as “liquid reserves” and the more money you saved, the better the interest rates and programs. People who have saved 18 months reserves can qualify for stated income guidelines with full doc pricing. And yes, lenders do count 70% of 401 K.
It is a wild, volatile market. Strap on your seatbelt and get informed. There are options out there, but one does need to know the nuances of the market to find the right loans and watch pricing daily to know which day to lock.
The bond market will close early today and be closed tomorrow in honor of Good Friday. We won’t see a change in rates again until Monday, March 24.
Lysa Catlin
CMC Finance, Inc.
(858) 456-3000
