Northern CA Mortgage Rate and something to think about….
By: Mark Simons
Mar. 18, 2010 (FreeRateUpdate.com) - Today’s rates for our POV* came out and saw a few major Wholesale Lenders reprice for the worse. Conforming Rates at 4.75% and Jumbo Conforming at 4.875%. SUPER Jumbos at 5.75% showing that rates are staying rock steady over the past couple of weeks. WHY is anybody’s guess. We shall see what happens when your Gov’t. stops its cash infusion 
into the secondary Market.
Build it, and they will come…
But it won’t be that easy. Here in the San Francisco Bay Area, the absolutely GREENEST place south of the Arctic Circle, home of of a Gov’t. job title Green Czar you might want to consider something should you decide to go alternative housing construction. These would be houses a little…er….different…than your standard Ward and June Cleaver Rancher. Houses made of Straw. Houses made of Mud. Houses made of recycled..stuff. Teepees. Even Houseboats! In case you missed the memo, Lenders have gotten down right picky since the Great Mortgage Meltdown of a couple of years ago. Getting a Construction Loan to build the Hut of your Dreams may be tempting, but try Refinancing it to a better rate later on. Or let’s say you built it, ya lived in it, now you want to cash out and buy that Sailboat so you can crouch down at 10am and say “yep, the Sun is over the yardarm, Happy Hour time!”. You may not be able to SELL it as getting a traditional Mortgage is going to be difficult. The key issue here is the Appraisal. Actually TWO key issues: 1) What are the comps? Not a lot of houses made of recycled coke cans in Danville? Hmmm…probably not. So this poses a problem for the Appraiser and trust me, when applying for a Loan, the Appraiser’s problem is YOUR problem. 2) The old HVCC. Yes, this nasty little bit of Gov’t. regulation pretty much eliminates LOCAL Appraisers and hence any Appraisers that may be more prepared to handle the Appraisal of alternate forms of Construction. The Journal had an interesting article on it – READ HERE : so BEWARE of those Green Dreams!
*POV = Plain, Old, Vanilla Mortgage product: 30yr fixed, fully amortized, single family residence, owner-occupied, at least 20% equity, proof of purchase for Girl Scout Cookies 3 years in a row.