Interest rates are going up when buying a home in Oakland and Piedmont CA

January 15th, 2012

If you’re thinking of buying a home in Oakland or Piedmont, LOAN RATES ARE GOING UP! rates-up-graphic

I’ve been speaking with Brian Moggan (Branch Manager with Mason McDuffie Mortgage) and after quite a bit of technical mortgage discussion I think the bottom line is that mortgage rates are going to be going up. 

Some facts to be aware of:

  • A conforming loan (in the SF East Bay) is any loan at or below $625,500.
  • Every conforming loan is underwritten to standards and costs set out by Fannie Mae and Freddie Mac, regardless of who’s making the loan (Wells, CHASE, BofA, MMCD etc.)
  • Fannie and Freddie were taken over by the government in late 2008 and the US congress became their conservator.  So in other words, Congress now sets the rules.
  • Fannie and Freddie charges a fee to lenders (called a “guarantee fee”) when they take delivery of a loan from a lender.

So here is what has happened.   Congress recently ran up against a payroll tax cut deadline. In order to extend the payroll tax cut deadline for 2 more months Congress needed to find the funds to pay for it. They decided to fund it by increasing the Fannie and Freddie “guarantee fees”. Since the cost of “making” a mortgage has just gone up and the increased cost will inevitably be passed onto borrowers, borrowers can now expect to pay about a quarter point more in interest rates on their loans.

 To steel from the words of Brian Moggan, “If the cost of cow feed increases, it will cost more to buy a steak.”

About Brian Santilena, Realtor, OaklandPiedmontBerkeley, CA – Department of real estate 01244612. Brian Santilena is one of the top real estate agents in the Oakland – Piedmont – Berkeley markets. He is a member of the Oakland Board of Realtors, the California Association of Realtors and the National Board of Realtors. Brian practices real estate in Oakland – Piedmont and Berkeley CA since 1998. He aggressively helps home buyers and home sellers who are looking to buy or sell real estate and Oakland homes, Piedmont homes and Berkley homes. See what some of his home selling and home buying clients have to say about working with Brian. He is with Pacific Union Real Estate at 1900 Mountain Blvd. Oakland CA 94611. He works in many neighborhoods in addition to Piedmont, Montclair, Rockridge, Upper Rockridge, Glenview, Trestle Glen, Crocker Highlands and many more areas and homes for sale. Brian is a licensed contractor and is listed on . If you are specifically interested in homes for sale in Rockridge and homes in Upper Rockridge, please take a look at Brian’s Homes In Upper Rockridge website.

To steel from the words of Brian Moggan, “If the cost of cow feed increases, it will cost more to buy a steak.”

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Market, Opinion

Author: BrianS

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