Amid all the hoopla about the $7500..nope $15,00... make that an $8,000 tax credit... there was almost no mention about reinstating the hybrid conforming loan limits back to $729,750 from $625, 500. This is good news for South Bay-Beach home buyers and owners who want to refinance existing loans.

The final tax credit will have a limited impact on our market because of limits on income and local home prices. Increasing the conforming loan limits however will have an impact on our Beach Cities real estate markets. Last year in the short time frame these loans existed(July-Nov.), a number of buyers took advantage of them. While the rates on these loans are slightly higher then rates on loans under $417,000 they are usually considerably lower then those on Jumbo loans... and much easier to obtain.

Anyone who has been loan shopping lately knows that jumbo loans are still expensive and not easy to obtain. Most lenders have a loan max of $1,000,000, with LTV around 50%-70% depending on the loan amount. There are not a lot of choices as to the term... either a 5/1 or a 30 year fixed. FICO scores to get a rate around 6.65% must be over 750+. The bank may also want you to set up an account with them to provide for direct deposit of the monthly payments. If you want a rate around 6% you will need a FICO of at least 780+. If you want to buy a $2M home you will need 50% cash down.

While banks will make loans over the $1M mark these only go to members of the bank's High Roller Club..( those having accounts at the private banking window) which usually means that you are willing to keep a minimum of $100,000 or more in accounts at the bank. The more money you stash in the bank the higher the loan amount, the longer the term and the lower the rate. Historically this was how banks conducted business back in the good old days.

A number of lenders are getting rid of their wholesale operations and only making loans directly to consumers via in house staff. This means that most Mortgage Brokers will not be able to place loans with BofA, Chase, Wells Fargo or many of the Big Banks. The banks often have better rates but usually offer fewer choices to consumers as they may only offer one or two loan options. Traditionally Mortgage Brokers were able to offer consumers an array of products. This means fewer options for buyers or for owners looking to refinance.