Conforming loan limits in Alameda county in CA

Asked by Newinfremont, Fremont, CA Wed Apr 15, 2009

In Alameda county (or more specifically Fremont CA) does confirming loan mean below 625,000 or 729,000?
I see that there is significant difference in the interest rates and some of web sites are not very clear about it

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Robert Spino…, Mortgage Broker Or Lender, Mill Valley, CA
Wed Apr 15, 2009
Newinfremont,

Some of your confusion may stem from the "jumbo conforming" or "hi cost conforming" limit in Alameda County itself. This limit was $729,750 in 2008, and was reduced to $625,500 at the beginning of 2009. Recent legislation will be reinstating the 2008 limits and we should see this change implemented across the board starting on May 1.

You are correct that if you attempt to take a loan at $729,750 currently, you're probaby seeing "traditional jumbo" rates, which can run significantly higher than either conforming or hi-cost conforming, depending on the loan product.

If I can be of further service, just get in touch.

Best regards,

Rob Spinosa
rspinosa@mortgagemasterinc.com
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Steven Ornel…, Agent, Fremont, CA
Wed Apr 15, 2009
Hi Newinfremont,

The base conforming loan limit is up to $417K. This is where the best rate will be found. There is also a temporary "Jumbo Conforming" limit based on one's County. For Alameda, this is up to $729,750 for a single-family home. You can check other Counties and limits for 2, 3, and 4 unit properties here:
https://entp.hud.gov/idapp/html/hicostlook.cfm

There are a number of reasons for the difference between conforming and jumbo conforming rates:

1) The government is only guaranteeing the base conforming loan limits, so investors of mortgage-backed securities (MBS) are focusing their dollars there.

2) The FED purchases of MBS is focusing on the base conforming levels.

3) With weak demand by investors for non-guaranteed Jumbo MBS interest rates must be higher to attract investors.

See the following two links if you really want to understand how mortgage rates are determined:
http://docs.Steven-Anthony.com/SAR-HowMortgageRatesAreDeterm…
http://docs.Steven-Anthony.com/RateShopping-DoItRight.pdf

If you truly are serious about buying your first step should be a loan pre-approval to confirm what you can actually afford before placing an offer. You can read more about the loan pre-approval process here: http://www.Steven-Anthony.com/default.aspx?pp=39377

Of particular interest is the FHA program:
1) 3.5% minimum Downpayment.
2) Up to a 6% Seller Credit allowed for buyer's closing costs and Seller concessions (non-FHA max is 3%).
3) FHA requires that identified safety/health issues be corrected.
4) FHA allows up to $8,000 in financed energy efficient upgrades without negatively affecting borrower's debt-to-income ratio.
5) Cash reserves not required.
6) Upfront Mortgage Insurance may be financed.
7) Non-occupying co-borrowers are allowed.
8) High and flexible qualifying ratios.
9) FHA loans are assumable.
10) No pre-payment penalties.
11) Will consider "compensating factors" in determining whether a loan should be granted.

This chart provides information on the First Time Home Buyer Federal tax credit:
http://docs.Steven-Anthony.com/HR1-FTHB-TaxCredit.pdf

I would be happy to set you up with an automated MLS search agent for properties that meet your search criteria. Results would be automatically emailed to you. Contact me if you are interested.

Best, Steve
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