Trusted mortgage advisors have informed us that interest rates have gone up slightly, but that this is typical after the Christmas holiday. Typically loans are already locked prior to New Years, so properties can close by the end of the year. Although rates have climbed slightly, they still remain historically low for San Diego home buyers.

Rates will probably creep up some with the thought of more loans being approved and it will loosen the rates for the Feds to charge higher interest.

Conventional/Government/Jumbo 5/1 Arm       5.125% 1 point
High balance conforming                                5.250% 1 point

Interest rates are hovering around 5.00% at 1point across the board with the exception of the high balance loans which are hovering at 5.250%@1 point. It appears the high balance loans are at least an 1/8 too high. It could be that the institutional lenders are weighing the refinance factor for December and January. Meanwhile lenders are waiting to see if these high balance loans come down in price. Many of these high balance refinances have had appraisal issues, because the sales prices are over the conventional loan limits and suddenly qualifying for the higher loan limit comes into play.  The big question is does the 73% refinance over sales in this arena come into play in the months of Jan/Feb, versus the 71% sales over refinances in July/August? It remains to be seen.

For more information on current rates & programs contact James Cass at Stearns Lending, Inc: (800) 924-8640.