Rain City Mortgage Rates
Rhonda Porter on 11 21, 2008
Just a reminder that next Thursday is Thanksgiving and banks will be closed. Our office will be closed until Monday, December 1, 2008. I hope everyone has a wonderful time surrounded with family and friends…who doesn’t need a long weekend?! 
I do like all the 
on this week’s rate post.
ALERT: if you are planning on closing a mortgage with loan amounts of $417,001-$567,500 by the end of the year, please check in with your mortgage professional. Some lenders are beginning to either pull out of that market or repricing that segment in advance of new loan limits. It’s an odd limbo time for lenders as they try to wrap up the jumbo conforming market to be able to deliver the loans in time to Fannie or Freddie before the lower loan limits go into effect. No lender wants to have a loan over $506,000 (for our tri-county area) if Fannie and Freddie will no longer buy it.
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied with a mid-low credit score of 720-739, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000. This scenario includes reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 45 day lock with no prepayment penalties on any of the rates quoted below.
30 Year Fixed @ 1 Pt: 5.625% (APR 5.775%) 0.25% to rate
30 Year Fixed with 10 Year Interest Only @ 1 Pt: 7.000% (APR 7.155%)
15 Year Fixed @ 1 Pt: 5.375% (APR 5.626%) 0.125% to rate
5/1 ARM – LIBOR @ 1 Pt: 5.375% (APR 6.943%) 0.125% to rate
Conforming-Jumbo/High Balance Rates. Pricing is based on the same criteria above except where the loan amount is $417,001 – $506,000 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $625,000 and a $500,000 loan amount.
30 Year Fixed @ 1 Pt: 6.000% (APR 6.147%)
FHA. Pricing based on credit score of 620 or better and loan amounts up to $362,790 for FHA in King, Snohomish and Pierce Counties.
30 Year Fixed @ 1 Pt: 6.000% (APR 6.685%) 0.25% to rate
FHA-Jumbo. Pricing based on loan amounts from $362,791 – $567,500 for King, Snohomish and Pierce Counties.
30 Year Fixed @ 1 Pt: Pt: 6.500% (APR 7.185%) 0.125% to rate
VA. Pricing based on credit scores of 620 or better based on loan amounts up to $417,000. VA loan amounts over $417,000 are also available.
30 Year Fixed @ 1 Pt: 6.125% (APR 6.244%). 0.25% to rate
Non-owner occupied/Investment Property. Pricing based on 30% down payment with a $400,000 sales price and credit scores between 720-739.
30 Year Fixed @ 1 Pt: 6.875% (APR 7.165%). 0.25% to rate
Prime Rate (what HELOCs are based on): 4.00%
12 Month LIBOR(what a majority of ARMs are based on): 2.705% per WSJ. 0.045% change compared to last Friday’s rate post.
This is just a small sample available of rates and products. Rates are as of Friday, November 21, 2008 at 1:30 p.m. and may change at any time. Available programs may change at anytime as well. Check out RCG’s new Mortgage Info page for live rate quotes via my Twitter feed.
This is not a guarantee nor is it a commitment of interest rate.
About the Author: Rhonda Porter
- Author's website: http://www.mortgageporter.com
- More posts by Rhonda Porter
- email the author
45 Responses to “Rain City Mortgage Rates”
Leave a Reply
Live Comment Preview
Popular Posts
Recent Posts
Recent Comments
- ARDELL: Kim and I have this
- ARDELL: I've decided my avat
- Ira Sacharoff: I have my face on my
- Talking (and talking…) online marketing in real estate « 4realz Strategies: ... don’t hesi
- ARDELL: Ray, Odd thing wh
Someone asked me the 30 year rate and difficulty level for a buyer of an $850,000 house with 10% down and a credit score of 720. Can you take a wild shot at that? It’s for a seller, not a buyer, so you don’t have to get exact quotes.
Thanks!
Ardell, I would not have a program for someone like that. I’d need at least 20% down and then I think that person may be better served by a small local bank or credit union.
Rhonda,
What you got cookin’ for investors right about now?
Seriously? No 90% LTV with PMI? What’s the price limit on that?
Tim, how about some breaded pork chops with mushroom risotto and grilled asparagus?
Investors need 25% down and will face tougher guidelines if they’re turning their current residence into a rental to buy their next home.
Ardell, I’ll have to research all pmi companies…I’m thinking rate wise, a buyer would be better off with what I suggested earlier.
I’m curious: How is it that a “a small local bank or credit union” is more likely to make a loan than a large institution? Aren’t they “too small to fail” and therefore more cautious?
sampai,
“portfolio” loan vs. loan that meet Freddie and Fannie guidelines for resale. Portfolio generally means they keep the loan in-house for the life of the loan. They can bend the rules, if they so choose, if they are not planning to sell the loan.
I calculated a certain segment of the market last night that would involve portfolio loans to a larger extent, local small spot builders. There was a minimum 3 1/2 year supply and potentially an 8 year supply (8 years based on 90 day activity). I doubt those builders are going to keep paying the carrying costs for 3 1/2 to 8 years, and the median price was $1.2M. Total homes in just 98033 was 147 built since 2003. 116 of those built in 2007 and 2008 and only 7 of those were not vacant. Bellevue had 169.
That’s why I don’t think we’re anywhere near recovery time. There will be more and more pressure on those that have to sell and not enough buyers who can get financing to buy them.
I just thought that if a loan seems too risk for even Fannie and Freddie to touch it, a small local bank would certainly want to avoid that exposure…
National standards are not necessarily less risky. I wonder what local portfolio banks were doing down in AZ and FL during the run up? That would be a tough market for them because to be safe they would have needed 40% down.
sampai,
Often it just doesn’t “fit” the parameters for a loan that is going to be sold. Say someone has 50% down and the monthly payment is only 18% of their gross income. The loan itself can be low risk with a low reserve amount. That’s what I meant by “the gestalt”. The sum of the parts. You might quailify, but the next three people don’t. Nothing changed about the HOA, it was the total risk based on all factors.
Rarely have I run into a situation where it had to be a portfolio loan for one of my clients. One was a total fixer and it wasn’t eligible for PMI. We did it as a construction/permanent loan through a local savings bank.
I’m thinking about that $7,500 loan/credit thing again. Maybe sampai should take it even though he doesn’t need it, and put it away at interest in case there is a special assessment sometime over the next several years.
Just thought of another more recent example of a need for a portfolio loan. Buyer has substantial assests in retirement accounts, but low current monthly income. Doesn’t want to take the tax penalty of cashing out retirement accounts. Her credit union or local lender might lend the money based on the overall financial strength of the borrower. But her ratios of income to payment don’t match the Freddie/Fannie guidelines.
Kary,
If the $1.2M homes have to sell at $850,000 to get sold, pushing the $850,000 homes down to $650,000, etc…isn’t that a means to predict the future? If the market is topheavy with vacant new construction, can’t the domino effect be foreseen?
If your loan amount is over the conforming limits of $506k, you may be better off with a small local bank or credit union–there still is not a real market for jumbo loans and most are better off with a portfolia lender regardless of downpayment.
Ardell, re #13, if that was in response to #10, what I was referencing was rapid appreciation over a short period of time, not absolute value. If property values in an area go up 20% a year for two years, making even an 80% loan is risky. But those loans could be made if conforming. The portfolio lenders in such an area though would be hurting, unless they took incredible risk.
Sorry, thought sampai’s comment was on my post where we were talking about his condo post. Didn’t mean to hijack your post, Rhonda
I’m a little fuzzy with all the activity here at the house. We’re already on our first batch of pumpkin pies.
ALERT: if you are planning on closing a mortgage with loan amounts of $417,001-$567,500 by the end of the year, you are a freaking moron.
Deflation folks. Deflation.
As to 17: What are you if you act on the advice of an anonymous poster on an Internet blog?
As to 13: Ardell, I’m not so sure the market was top heavy. I think the problem was the bottom–and it started over a year ago. The first time home buyers believed the BS in the press and thought that mortgage financing had dried up. That made it difficult for people to move up, and it’s finally worked it’s way through the system. Recently, however, I’ve noticed a return of the first time buyer. The lower prices have helped attract buyers. Or maybe they actually noticed the few reports that mention real estate credit is about the only credit not greatly affected by the current situation.
Ardell, no worries! I was actually at Southcenter Mall yesterday afternoon with my husband. We had just dropped my son off at his girlfriends house and we’re driving by…he wanted to see the new mall. We left there just before 3:00 (about an hour before the fatal shooting).
Kary,
So there not being much of a market for jumbo loans (Rhonda’s #13) means nothing to the over $500,000 market?
Ardell, I do receive calls for jumbo loans (currently over $567,500) for purchase and refinances. I have been referring them them other resources (community banks, credit unions). I do have resources for these loans, however, I’m not sure that I’m competitive in rate.
Synthetic, I don’t think people who are buying or refinancing right now are morons. I welcome your comments but could do without the name calling.
My clients who are refinancing are taking advantage of lower interest rates and those who are buying have finding homes they’ve been waiting to buy but are doing so at a lower price.
Synthetic, would you explain to our readers what deflation is?
Thanks for the claification, Rhonda. So they are readily available? It’s just a matter of who has the better rate?
I believe so. It’s hard for me to say since I haven’t attempted a true jumbo mortgage in quite some time. Maybe one of our readers can speak up if they’ve closed a jumbo loan in the last 6 months.
Synthetic said: “ALERT: if you are planning on closing a mortgage with loan amounts of $417,001-$567,500 by the end of the year, you are a freaking moron.”
I don’t understand Synthetik’s comment. I know someone whose parents offered them a house they own with a tax assessed value of $1.4M for $800,000. They have $250,000 to put down and can well afford the payment on the $550,000 loan.
If they wait until the loan cutoff amounts go to $506,000, wont that be “moronic”? Is there something specifically “moronic” about loans in that range, regardless of the value of the purchase? If someone is able to buy a house at 1999 prices, but the loan amount falls into that range, is that bad?
Deflation is the opposite of inflation. It is a concern because it can lead to an economic downward spiral.
I’m not so sure that we’re actually seeing any signs of deflation, as opposed to merely the price of some commodities (mainly oil) working it’s way back through the economy. Just as the price of one item (oil) going up isn’t evidence of inflation, the price of one item going down (oil) isn’t evidence of deflation. The former is probably more “true” than the latter, however.
The US hasn’t seen deflation since the 1930s. I think Japan had it more recently. What I’m not certain of is why deflation can’t be fought just through monetary policy. Inflation right now would solve a lot of problems, so it wouldn’t surprise me to see the government intentionally (but silently) create inflation.
“I know someone whose parents offered them a house they own with a tax assessed value of $1.4M for $800,000.”
If I were the IRS, I’d see that as a $600,000 gift and tax it accordingly
I’m sure there’s some gift exemption, though, for a one-time thing like that.
KLK -
No deflation? Where do you think the money goes when homes plunge in price across the country and the stock market indexes drop 40%? What happens when commercial paper isn’t purchased anymore? When the only lender in town is the government? Its deflation everywhere, and Bernanke is working to stop the spiral now before it takes hold. He is pretty limited in policy options, however, since our entire government is financed with debt. You want to stop the deflation without pissing off the people who are nice enough to pay for the TARP, war in Iraq, etc. Its quite a balancing act and it seems he is losing.
Kary, you should read some of Paul Krugman’s latest NYT columns. He’s the latest Nobel prize winner in economics and generally an optimist, but he’s got some good explanations of why we are in a deflationary spiral and why it’s harder to fight it. Basically, the federal funds rate is close to zero already, and they can’t drop it below zero. Dropping the rate is the primary monetary policy for fighting deflation – spurring inflation. He wants to spend 600 billion on things like infrastructure spending to pump money into the economy.
Also, big monetary policy changes are hard to come by since the presidental administration is extraordinarily weak, even for a lame duck situation, and new guy really can’t do much until he takes office.
http://www.nytimes.com/2008/11/21/opinion/21krugman.html
That was an excellent article, Cautious Buyer. Thanks for the link.
b–the stock market going up isn’t inflation. When it goes down it isn’t deflation. The same for commercial paper.
House prices rising/falling would only contribute to inflation/deflation somewhat–I believe rental and interest rates would also affect the result.
Snythetic, since YOU brought up this topic, it would be nice if you would return to explain the difference between deflation and depreciation.
CB, yes good article. Fortunately we’re less than two months away from new leadership, and I think they’ll need most of that time to formulate their own plans. So I’m not sure how much is really being lost with the passage of time.
KLK -
Deflation is the destruction of money in our fiat currency world. The market is plunging because the big players are either dead or can’t get the debt to play (leverage). How low did the market get before you heard Joe the 401k say he was getting out to some mutual funds? CP going nowhere means no more debt (money) is being created in those markets, which are enormous. Home values plunging means, again, much less debt is being created and much more money is being lost in another enormous debt market. If we are losing more money than we are creating, we have deflation. When people decide to buy things later because they will be cheaper, the consumer realizes there is deflation. Why do you think home and car sales are so slow right now? Because they will be cheaper next month, and the month after, etc. If many economists who saw this coming are right, we can expect to see similar things occur in most markets over the coming couple of years. Right now a TON of money, created by debt, is vanishing. If we are not making more money than we are losing, we are deflating. The fact the FFR is 1% and going to 0%, with huge government programs pumping in money at the same time and we still have a deflation problem shows you the scope of the money destruction going on.
KLK -
Maybe this thought experiment will help: I can buy the same house in $500k of 2008 dollars that I could for $700k of 2006 dollars. Use that idea that across pretty much every asset class today and you have what is going on right now.
b–you and I will just have to disagree with what deflation is. You’re confusing wealth being created/lost with inflation/deflation. One can lead to the other, but they’re not the same thing.
RE 24
Good point Kary, last I read he might introduce a bill as a senator and sign it as president.
Here’s another one where Krugman makes a case for the stimulus.
http://www.nytimes.com/2008/11/14/opinion/14krugman.html?_r=1&oref=slogin
I like the idea of pushing cash into the economy via infrastructure spending as stimulus because if all else fails, at least you get the infrastructure. I’d rather have clean power and transportation than a bonus pool for Goldman Sachs or private jets for Mulally and Wagoner.
No matter what, sooner or later our children will have to take money out of the economy to pay our debt. Maybe we could buy them something nice with it like the roads and hydroelectric dams our grandparents left us.
I haven’t read about any credible economist who doesn’t think deflation is a concern right now. I have read about several who think we should be concerned.
“last I read he might introduce a bill as a senator and sign it as president.”
I’m pretty sure he already resigned as Senator.
I’m not saying deflation isn’t a concern, I’m just saying “b’s” examples are not evidence of deflation. Remember, we haven’t had deflation since the 30s, but the stock market hasn’t only gone up during that period. Nor have housing prices. Using those as evidence of deflation makes little more sense than my saying we’ve had deflation since 1999 pointing to the price of DVD players since that time.
The stock market going down just means that stocks are worth less now. If people are not making money off of stocks, or losing money, that will mean some people have less money to spend on things, and that will tend to drive prices lower, but any effect is indirect. To the extent stocks are held in 401k accounts, any significant effect on spending would be far in the future. To the extent that stocks are lower because people moved to bank accounts or federal bonds, again little or no effect on spending. To the extent that stocks are lower because of foreign investors pulling out, it wouldn’t affect spending in any way, and thus not even have an indirect effect on inflation/deflation.
Even an up market doesn’t necessarily result in inflation. Over the past 16 years or so we’ve had the market head up significantly without inflation being out of hand.
BTW, CB, I mentioned deflation in post 18 here–the one where I said if I knew where inflation was headed I’d give you a house!
http://www.raincityguide.com/2008/11/09/sunday-night-stats-5-year-hold/
Where are mortgage rates headed today with this mornings newest citigroup bailout?
If you were someone who is closing on a new purchase FHA 30 year within the next 2-3 weeks, would you lock or float?
Cal, I quoted 30 year fixed this morning via Twitter (you can access it from the Rain City Guide mortgage page) at 5.75% at 1 point (apr 5.902).
FHA at 1% is at 6.00% with an apr of 6.685%.
If I were you, I’d lock with a mortgage originator who has the capability of floating down your rate at no cost to you should they improve by 0.25% or more.
[...] Rain City Mortgage Rates [...]