Jumbo rates go up!

[GetReal]

[EastSider]

[GetReal]

[EastSider]

I'm surprised that there's not been more discussion on this topic. Don't people see the jumbo-loan-rate-hike impacting the local market? OR am i missing something?

[jillayne]

remember: for the folks with great credit, loans are still available. Yes, a person could go 80/20, but the interest rate on the 2nd mortgage would be high.

Now we have a secondary problem entering the market: liquidity. There are fewer buyers for second mortgages, going all the way to 100% LTV, UNLESS the person has a great credit score.

So, with eastside homes, IF the folks with less than desirable credit scores are still putting LOTS of money down, all's well. But we know this most likely is not the case in all eastside home purchase circumstances.

Also, some eastside home purchasers come in with all cash, or a huge downpayment. I would guess that's not the case (on a regular basis) for neighborhoods like, say, Everett or Kent.

[GetReal]

[george]

Says the New York Times today:

In a Credit Crisis, Large Mortgages Grow Costly

"Rising home prices were the oil that greased the wheel of this engine of growth, and falling home prices are the sand in the gears that are causing it to grind to a halt."

I'm starting to think it won't end well

[GetReal]

[bidingmytime]

[EconE]

[mike2]

[GetReal]

[mking]

[urban exile]

[bidingmytime]

I definitely get that I have been spoiled and that it could (and probably will) get much much worse. My point is that it will take a while for people who are used to the good rates to adjust. In the mean time they will choose to walk away.

As far as the impact on prices, I think it will take a while for sellers to realize what is happening. They will have just as hard a time accepting the perfectly good $600000 offer on their $650000 house as it is for me to accept the perfectly good 8% it would take to buy it