Long Beach Real Estate-Long Beach Condos

I warned you that it was coming. I said that time was running out for some Long Beach home buyers back on November 29, 2007. A few of you got the process started and have loans that can close, at today's rates, until January 30, 2007.

Fannie Mae and Freddie Mac are implementing a tiered pricing structure for loans bought after March 1, 2008. What this means is that lenders who originate those loans have to SELL them to Fannie and Freddie by that time. Most lenders adjusted their pricing standards immediately. One bank is holding out until December 31, 2007. If you want to buy a home or condo in Long Beach, the time is now to secure your home loan.

If you don't have a credit score of 680 or higher, it will cost you more money. Let me explain. Today, a 30 year fixed rate loan can be secured at a rate under 6%. It will cost you about 1% of the loan to get that rate in an upfront fee. This means that the cost of obtaining a $400,000 mortgage will be $4,000 today.

If your credit score is below 680 but higher than 660, it will cost .75% or an extra $3,000 to get that rate. If your credit score is below 660 but higher than 640, it will cost an extra 1.25% or $5,000 to get that rate. If your credit score is below 640 but higher than 620, the cost will be an extra 1.75% or $7,000 to get that rate.

This means that a borrower with a 637 credit score will get a 5.875% rate but pay a total of $11,000 if he/she waits until after the holiday; that'sseven thousand dollars EXTRA; that could make a few mortgage payments, huh?

What if you don't have the money? Well, that fee can be recouped by the lender by charging you a higher interest rate. Let me break down the approximate add-ons for you:

660-679 credit score- add approximately .375% to rate

640-659 credit score- add approximately .625% to rate

620-639 credit score- add approximately .875% to rate.

That 637 credit score can get a 6% rate today. On January 2, 2008, that rate will be 6.875%; that's an extra $310/ month. That extra $310 a month could translate to some $45,000 in price. So, if you're waiting for housing prices to drop another 10%, make sure your credit score is above 680, and well above that mark. If it's not, that "savings" you so hoped to get will be eaten up by the higher mortgage payment.

Okay, I got you scared. There's still hope. If you call me at 858-699-4590, I'll run your credit report so you can be sure that you are well prepared for the changes. I can still pre-lock a mortgage, next week, for a closing up until February 15, 2008. If you're currently shopping for a home in Long Beach, take action today!