Will Rates Drop For Higher Priced Los Angeles Real Estate?
R
ates on larger mortgages for the purchase of Los Angeles real estate should finally come down. Fannie Mae and Freddie Mac recently issued new loan underwriting criteria and will start buying loans of up to $729,750 from lenders on May 4. Some industry analysts believe this will result in lower mortgage rates.
This week, Wells Fargo started offering conforming loans of up to $729,750, and Bank of America will begin offering them by mid-May
Historically, rates on loans higher than $417,000 – often referred to as jumbo conforming loans -- are one-fourth to one-third of a percentage point higher than rates on $417,000 or lower loans. By Fannie Mae and Freddie Mac agreeing to guarantee loans of up to $729,750, rates on jumbo conforming loans likely will be comparable to the rates offered on loans of $417,000 and lower....good news for Los Angeles real estate buyers.
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