It’s absolutely amazing that you can get a new loan at 4.5%, 30 year fixed.  If you currently own a house and have it financed, I urge you to contact your mortgage consultant to discuss if refinancing is the right option for you.

30 Year Fixed San Marino Mortgage Rate Hits Record Low. In the most recent survey period, mortgage rates plunged amid fading inflation concerns, more economic bad news and the Fed’s historic rate cut.

The Fed’s next meeting is scheduled for January 28, at which time we expect the Fed rate to stay unchanged.

Here’s a rate sheet from Wells Fargo with San Marino mortgage rates as of December 19,2008:

If you need a reference to a mortgage consultant, please email me at Irina@Irina4RealEstate.co and I’ll be happy to send you information on the best consultants in the mortgage industry.

Irina Netchaev is a licensed California real estate broker and has a team of San Marino and Pasadena realtors.  Irina can be reached at 626-627-7107 for a private consultation.

Today’s CPI report signals deflation, or a prolonged price slide, may become another hazard facing Federal Reserve Chairman Ben S. Bernanke and President-elect Barack Obama. Deflation could worsen the economic downturn by making debts harder to pay off and countering the impact of Fed interest-rate cuts.

“The economy’s really just in horrific shape,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York. Fed officials will “take rates as low as they have to” to avoid “a deflation-type scenario, which now all of a sudden is very possible.”

LaVorgna predicts the Fed will cut its main rate to 0.5 percent from its current 1 percent when it meets on Dec. 16.

Fed Vice Chairman Donald Kohn said today that while the risk of deflation is “still small,” policy makers must be “aggressive” in fighting the danger. The economy “is declining right now” and will record a couple of quarters of contraction, he said in answering questions after a speech in Washington.

Fed policy makers last month forecast the U.S. economy will contract through the middle of 2009, with some officials prepared to cut interest rates further in response, according to a record of the group’s meeting.

If the Fed’s thinking of cutting rates further, why aren’t San Marino mortgage rates going down?  I think it’s because the Fed has done all it can do.  Future rate cuts are like that eighth scotch.  Drinking that eighth scotch isn’t going to make you feel any better than the seven prior.  It just might make you feel worse.

I advised folks, right after the election, to lock loans with rates under 6% if they were closing within 30 days.  Today, I”m suggesting that you lock any loan on a home that you are purchasing in San Marino that is closing this year.  Today, a 45-day lock for a 6.0% rate would costs 1.25%.  While you may see rates drop below 6% , in the next 45 days, the risk of them moving higher is greater.

Take 6% and run.

It all sounds great, right?  Fabulous news!

NOT Really!

Well it’s not as it seems just like all the other announcements that have been made recently.  FNMA is trying hard, but we need to look at other factors.

• Yes… FNMA will allow you to get a loan with as little as 3% down. 
• Any loan amount or a combination of loans, if you’re fortunate to find a bank that will offer a 2nd trust deed at this time, over 80% will require Property Mortgage Insurance (PMI).
• Word in the banking industry is that there are announcements from PMI companies indicating significant mortgage insurance retractions that impacted a host of programs – meaning that beginning immediately it will be much more difficult and more expensive to get PMI insurance.

If you are a home buyer in the Pasadena and surrounding cities, be prepared to still come up with a significant downpayment between 20% and 25% down.

There are investors that are offering programs with less money down, but they require FICO scores higher than 700 and at least 6 months of payments in reserves.

Mortgage industry guidelines and programs are changing on a daily basis. 

It is critical that buyers are speaking with a Mortgage Professional early in the process.

Sellers make sure that your Real Estate Agent doesn’t just show you a pre-approval letter for a potential buyer, but gets on the phone and speaks with the lender to understand if the buyer is truly qualified and approved to purchase your home.

Be aware of the changes in the market place and stay tuned.  I’ll be posting more information on mortgage industry changes as it becomes available.

In the meantime, if you have questions or would like me to address specific issues, please do no hesitate to comment here or send me an email at Irina@Irina4RealEstate.com

If you need a recommendation to a good lender, let me know and I’d be happy to provide several references.

A conforming loan amount is simply the amount of money that a bank will lend you at lower interest rates.  Currently, this amount is set at $417,000.  So… if you were to buy a home for $600,000 and put 20% as down payment ($120,000), you would need to get a “non-conforming” loan or what the banks call a jumbo loan of $480,000.

The reason there’s confusion on this package is because all the details have not been finalized yet.  HUD has 30 days to provide certain information like median area home prices, MSAs and mortgage principal obligation limits after the bill becomes law.

For the most part, we can expect that the maximum conforming loan limits will be the higher of the $417,000 or 125% of the area median home price, not to exceed $729,750 for Fannie Mae and Freddie Mac loans.

This is great news for Pasadena and San Marino home buyers and home sellers.  The median price for Pasadena (91103 and 91104 zip codes) homes as of December of 2007 was $680,000 as reported by www.dqnews.com.  San Marino home sales median for the end of 2007 was at $1,380,000, again as reported by DQNews.

This means that if you are considering purchasing a median priced home in Pasadena with 20% down ($136,000), you’d be able to get a conforming home loan for $544,000.  This will afford you a better interest rate (at least a 1 point differential) and in many instances avoid a buyer getting a 2nd loan on the property. 

Stay tuned for more updates as details become available.

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Other interesting information:

• Top 10 Seller Mistakes
• Thinking of Selling Your Home – What should your Agent be doing?
• Pasadena Realtor Tells All:  Seller Beware!
• Heard the Buzz about Staging?  What is it?
• FICO Scores and VantageScore
• Save Thousands of Dollars in Taxes
• How is your Real Estate Market?

This week’s Consumer Sentiment Report wasn’t too bad, translating into healthier corporate profits for the Stock Market and slightly higher Stock Prices. Couple this with passage of the (i) Economic Stimulus Package, (ii) Warren Buffett’s statements on helping insure municipal bonds and suddenly it appears there’s more economic health on Wall Street than previous months have dictated.

What does all of this mean? The Stock Market outperformed the Bond Market this week. This means higher interest rate pricing.

Conforming Loan Amounts = Loan Amounts Below $417,000
($400,000 Loan Amount | 80% CLTV | FICO = 680+)
5.875% (6.02% APR)

Jumbo Loan Amounts = Loan Amounts Between $417,000 & $650,000
($600,000 Loan Amount | 80% CLTV | FICO = 680+)
7.125% (7.239% APR)

Contact me directly for pricing above $650,000.

*Disclaimer: World Wide Credit Corp is an Equal Opportunity Lender. Interest rates are subject to change in accordance with changing market conditions and are also subject to change upon borrower qualification. Contact me directly to verify current pricing.

Recommendation: Lock-In your mortgage rate at application.

We have key inflationary data scheduled on the Economic Calendar for release next week so expect more Bond Market (a.k.a. interest rate pricing) volatility. Stay tuned for more updates!

If you are considering buying real estate in Pasadena, San Marino or the surrounding areas, please give Irina Netchaev a call at 626.204.3340. There are many new homes for sale coming up every day.  You may also visit www.SearchMLSforFREE.com to sign up for a daily list of homes for sale.

Lock or Float? Mortgage Rate Locks Defined!

“Better get under cover, Sylvester. There’s a storm blowin’ up, a whopper.” Professor Marvel; The Wizard of Oz

Just when you thought it was going to be a light week on the Economic Calendar, the Fed comes out with an Emergency Rate Cut!

A total of 75 basis points (.75% down to 3.50%).

The Bond Market is performing well in light of the rate cut (which is good for mortgage rates) but keep an eye on the market.

Remember, Stocks and Bonds compete for the same investment dollar. This means that investors can choose to invest their money in the Bond Market or they can choose to invest their money in the Stock Market. If they choose the latter, expect a deterioration in mortgage rates.

But for now, we’re still holding out around last week’s lows!

5.375% (5.547 apr)    30-Year Fixed Rate Mortgage

(80% LTV & conforming loan amount)

Jumbo Mortgage Rates:

6.25%    (6.455 apr)    30-Year Fixed Rate Mortgage

(80% LTV | loan amounts $417,000 to $650,000)

Contact me for pricing on loan amounts greater than $650,000.

Disclaimer: Rates are subject to change upon borrower qualification. World Wide Credit Corporation is an equal opportunity lender.

Recommendation: lock-in your mortgage rate for any new purchase applications. If you have a refinance closing in the next 30 days, lock-in your rate. If you’re closing in the next 45 days, it’s advisable to float and check back for more updates.  ]]> http://www.sanmarinocarealestatehomes.com/pasadena-mortgage-rate-update-january-22-2008-emergency-fed-funds-rate-cut/feed/ 1