The economic stimulus package that the Federal Government passed earlier this year combined with numerous rate cuts from the Fed were supposed to increase liquidity for mortgages and to lower interest rates on Jumbo Mortgages (up to $790,000 in Hawaii). For a few months jumbo rates hovered at about 1% above conventional loans, making re-fi’s or new purchases even more difficult than conventional loans.
Well the rates on jumbo mortgages have finally come down. Jumbo loans up to $790,000 are now available more or less at conforming rates according to Gary Rosenberg of International Mortgage. These are for full documentation loans. Stated income / limited doc loans however are still extremely difficult to obtain. It’s a minor change, but good news for those with strong credit that are able to document income and assets. This should help the Maui market where nearly all purchases involve larger loans.
In addition, it appears as though legislation to help the foreclosure situation may be near. Click here. These bits of positive news ought to help the market.
Will there continue to be bumps in the road? That’s a safe bet, but if you are looking for a home on Maui and have great credit or cash, there are deals to be made. I closed a sale on Friday that was a good example of a savvy purchase. My client, a Canadian with cash, purchased a beachfront condo at about 20% below the most recent comp. His offer for a quick, cash close provided the owner with incentive to make the deal. Both parties are happy. That is my kind of real estate transaction.