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Yes, the Fed cut the rate again on Oct 31.
Here is the brief summary for this industry:
1)The rate cut will eventually lower for the short term ARM rates, especially 3/1ARM and 5/1ARM. But how lower those ARM rates can go depends on the lender\'s financial performance and overall economy.
2)Conforming Loan Limit: The overall conforming loan limit will not go lower(will be announced later Nov or Beginning Dec). Though California Congressman and Governmenor proposed to the Congress for 625k limit, it\'s unlikely to be approved by Fed and Bush Administration in the near future.
3)Sated Income Loans: It\'s very hard to get approved unless you have very strong assets and/or lower LTV(loan to value ratio).
4)2nd Loans Market: It\'s hard to get loans approved with lower than 10% down payment(especially for Jumbo Loans). And with National City Equity closed the door (merged with first loan wholesale), Bank of America exit the whole market and Citi HELOC exit the purchase 2nd, the borrowers have limited options for 2nd Loans now. But you can still get good rates from the Credit Union, or bank retail channel(like BOA retail).
5)Interest Only Loans: Starting Feb 2008, all interest only loans will be qualified as fully-index(the current qualification rate will be around 7.5%).
6)Lender\'s DTI(Debt to Income Ratio) requirement. Though you can still find some lender with DTI of 55%, most lenders require 45% or lower now, especially if you want to get lower rate.
7)ARM Qualification. More and more lenders will use fully-indexed rate(around 7.5%) to qualify the loans with 1yr, 2yr, 3yr fixed programs.
8)If you have 2.5% APR loans, be prepared for more questions from the new lender at next refinance. Some lenders will ask you to explain the purpose of that refinance.
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