Long Beach Mortgage Rates Report: March 21, 2008

Posted on March 21, 2008 07:20:16 by Brian.Brady

New FHA Loan Limit For Long Beach Homes

Updated 10/10/2008:

FHA loans are available to a maximum loan of $729,750 with a minimum 3.5% down payment (up from 3% as of 10/1/08) until January 1, 2009 when they are currently scheduled to drop the maximum loan amount to $625,000, this could change. 

FHA Lending Limits for LOS ANGELES COUNTY (LOS ANGELES-LONG BEACH-GLENDALE, CA METROPOLITAN AREAS): 

• Single Family Home or Condo: $729,750
• Duplex:  $934,200
• Tri-plex:  $1,129,250
• Four-Plex:  $1,403,400

Jumbo Loans are currently requiring approximately 30% down payment and start at $729,000, also currently scheduled to drop concurrently on 1/1/09 to $625,000 unless something changes between now and then. 

What is the new FHA loan limit for Long Beach?

I was a guest on Real Estate Radio USA, yesterday, hosted by Barry Cunningham and Barry Johnson.  I talked about the impact of the higher conforming and FHA loan limits and how it might shore up the "desperate" real estate markets.  Real Estate Radio USA is a provocative and engaging program for real estate professionals and airs daily from 1PM-3PM (Pacific Daylight Time).  Listen to my interview here.

Sorry to keep you in suspense with the little self promotion there.  The new FHA loan limit for Long Beach is $729, 750.  FHA loans can be useful for Long Beach home buyers because:

1- Only 3.5% downpayment is required.  Some Long beach homebuyers have had to put as much as 10% down to obtian financing; the FHA loan can solve that problem.

2- Credit scores are not used in the underwriting process.  You still need to pay your bills but a loan can be funded if your credit score fell because of incorrect information on your credit report.

3- FHA loans don't have a "declining market adjustment".  Many Long Beach home buyers have been caught by surprise, when trying to obtain a home loan, and have had to put an extra 5% down.

4- the FHA 203-k loan program allows for "rehab or repair" financing.

Interested in buying a home in Long Beach but unsure about how to finance it? 

Call Brian Brady at (858)-777-9751

Posted on March 13, 2008 01:59:09 by Brian.Brady

Long Beach Mortgage Rates Report: March 10, 2008

Warren Buffett describes his investment philosophy as being fearful when everyone else is greedy and greedy when everyone is fearful.  Today, fear abounds in the mortgage bonds market and that is driving mortgage rates higher.

 

Rampant fear is why I'm suggesting that borrowers float their mortgage rate. I had been advising borrowers to lock loans, until all hell broke loose, on March 6,2008.  Investors are worried that the mortgage bonds they hold will be worthless.  This market is a lot like the junk bond market of the late 80s.  Those that panicked lost money; those that kept a cool head, profited.

 

Today a 30 year fixed rate loan is offered at 6.25%, up from 5.875%, and a 7 year ARM is at 6.125%, up from 4.875%. 

 

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Laurie Manny Long Beach Realtor (562) 212-5420
Main Street Realtors Belmont Heights 244 Redondo Avenue Long Beach California 90803
Long Beach Real Estate Blog Long Beach Real Estate Website

 

http://www.lauriemanny.com/0023C1

Posted on March 11, 2008 02:30:32 by Brian.Brady

Long Beach Mortgage Rates Report: March 6, 2008

Posted on March 06, 2008 06:28:38 by Brian.Brady

Can I Lose My Long Beach Home Because Of a 7-Year ARM?

In today's Long Beach Mortgage Rates Report, I highlighted a 7-year ARM.  The post drew this comment:

You suggest a 7 year ARM? What happens if home values don't fully recover in 7 years? I dont want to be stuck owing more than what my home is worth when my rate resets.

Great question.  It shows how The Media is disseminating poor information about this mortgage crisis.  A 7-year ARM is a fully-amortized loan (which means it will be paid off in 30 years) with a fixed rate and fixed payment period for the first 84 months.  For a loan funded in March, 2008, that means the first payment will be in May, 2008 and will not change until April, 2015; let that sink in....2015.

At the end of 7 years, the loan turns into a one year ARM, amortized for 23 more years.  The new interest rate is determined by adding the index and the margin together.  Most ARMs are based on the LIBOR index, which today is about 3.5%.  Most ARMs have a margin of 2.75.  That means that if this loan were to adjust today, the new rate would be about 5.75%...not so bad, huh?  As you can see, rate rests aren't that awfully bad.  In fact rate resets are accounting for less than 2% of the foreclosures in California.

The following Question and Answers are not part of the original comment but frequent questions I hear daily.  My answers may appear to be flippant; they're not intended to be. 

WARNING:  HARD-CORE TALK ABOUT THE REAL ESTATE DECLINE AND MORTGAGE CRISIS

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Posted on March 03, 2008 13:26:41 by Brian.Brady