On May 6, 2008, Fannie Mae made an announcement to improve the new Jumbo Agency program pricing to be closer to Conforming Agency pricing throught the end of the year. As a result, the rate difference between Conforming Loans ( Loans under $417,000) and “Jumbo Conforming” loans ( Loans between $417,000 and $729,750) shrank from about 0.50% to 0.125%.
This means that “Conforming Jumbo” Loans are at an interest rate of approx. 5.875% at .50 point Cost ( As of 5/7/08)! Apr 5.937%. Keep in mind that these new increased “Jumbo Conforming” loans are due to expire at the end of this year, so now is a great time to consider buying a home, especially a condominium in the South Bay and the Palos Verdes Peninsula. When the conforming loan limits drop back to $417,000 at the end of this year, loans in excess of this amount will be at a much higher interest rate ( Jumbo loans cureently are at an interest rate of approx. 7.1%).