Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : California mortgage rate would go down if conforming mortgage limit is raised

« Nevada town may limit number of payday loan stores | Main | California real estate buyers spend too much on their mortgages »

September 18, 2005

California mortgage rate would go down if conforming mortgage limit is raised

California mortgage rates are pretty high, just as the home prices. Well, mortgage rates are about the same as anywhere, but California real estate, particularly in the Bay Area, is the most expensive in the US including Hawaii.

So California Mortgage Brokers Association released a report last month which suggests that housing would become more affordable in high cost areas, if only federal limit on conforming loans is raised from the current $359,650 to "the median house price, not to exceed 150 percent of the ceiling elsewhere." In the Bay Area, that would mean $539,475.

You can read the whole story titled "Expanding Home Ownership in High-Cost Areas, A Report on the Economic Benefits of Adjusting Conforming Loan Limits" at California Mortgage Brokers Association, but I would like to put two cents:

It is quite easy to qualify for a mortgage. No income, no asset, no employment verification mortgages are common. Interest only mortgage for up to 10 years are everywhere. Negative amortization mortgage which is cutely called Negam is game all around. What the hell, some programs let you even skip a payment or two.

I bought my home in the end of 2000, when conforming mortgage for a single family home was just raised from $250,000 to $275,000. From 2002, it was rising to $333,700, and this year it is at $359,650.
Where it is going to stop, no one knows. If the increase keeps this robust pace, the conforming mortgage limit will likely hit cool $1,000,000.

 
Welcome

Bad Credit Advisor online magazine provides daily news about credit, debt and mortgage. We aren't paid to mention specific deals or products. We cover what we think is interesting as industry professionals ourselves.

Archives
Recent Entries
Information

About
Contact
Disclaimer

Syndicate

RSS 2.0 Feed Bad Credit Advisor RSS 2.0 Feed

Subscribe with Bloglines

Add to MyYahoo