Economic Forecast for 2014 & Your Friday Rate Sheet

Interest Rate Sheet for Jan. 3


Myth Buster of the week:

FHA minimum credit score is 640. Not true. FHA does not set credit score limits; Wall Street does.

I’ve worked with lenders who have a minimum 580 for 3.5% down and 500 for 10% down.

You may have a client with a low credit score or even a credit problem, but that doesn’t mean they are a bad risk.  Luckily some lenders recognize this.

So, when talking to potential buyers encourage them to get a full review from me.  Even if they have been turned down by the big banks, who do have high minimum score requirements (660 with Well Fargo,  640 with Bank of America), I may still be able to help them…and you.

Economic news : What to expect in 2014.

The reviews are mixed. Housing starts were up modestly in November by .2%, but that’s after a 4-month decline.

Unemployment was steady, however those numbers included holiday part-time seasonal help.

With the unemployment benefits ending, the numbers might look better in the coming months, but the reality is more people are unemployed with no safety net.

How will this affect the economy? And how deeply? Time will tell.

If rates inch up we will see housing starts stall. As the government curtails and/or cuts their support of lower rates by cutting back the QE3, higher rates are a likely scenario.

On the other hand, higher bond rates are good for new retirees relying on that income.

My hope is that the higher rates and slower home sales will help create more of a buyer’s market,  since the 2nd half of last year was difficult for many home buyers who were chasing the market up.

VA Announcement

VA Announced the loan limits for high cost areas, which CA is one of them. However, each county has a different limit.  To see the complete list visit:

About Your Rate Sheet

**conforming means loans under $417,000. Conventional means Fannie Mae and Freddie Mac.

If you have a client who is close to having an offer accepted and is nervous about rates, don’t worry because interest rates can be locked in over the weekend.

Remember we also have the float down: if rates improve more than .25% after lock-in the client gets the lower rate.

All rates are quoted at a 45 day lock in and assume a 720 credit score with 20% down except for FHA.

1 point is 1% of the loan.

Programs quoted as having 1 point also have the option of 0 points and the option of the 0 cost loan.

Jumbo loans are loans that have a loan amount of $625,501 and above on conventional programs.

If you have any questions or comments, please contact me at or call 310-218-6855.