Fremont Bank Notifies California Homeowners and Homebuyers to Capitalize on Low Interest Rates Before New Conforming-Jumbo Loan Limits Change

Many California counties will soon be affected by significant change in maximum lending limits

FREMONT, Calif.--(BUSINESS WIRE)--Fremont Bank, a leading full-service mortgage lender in California, is alerting well-qualified Bay Area and Southern California homeowners and prospective buyers to take advantage of low interest rates before October 1, 2011, when a significant change to the current maximum conforming-jumbo loan limit will take effect.

“With a precipitous drop in interest rates over the past few months and the imminent shift of the conforming-jumbo loan limit, California homebuyers are in a great position to capitalize on these extraordinary conditions, but the window will close soon”

Under the Housing and Economic Recovery Act of 2008, the conforming-jumbo loan limit threshold will be set at 115% of the 2010 median home price for select California counties — not to exceed 150% of $417,000 or $625,500. Given the recent rate spreads between conforming loans and jumbo loans (currently above $729,750), affected homebuyers could see rates .50% to .75% higher after October 1. For example, under the new calculation, Napa County residents could see the maximum conforming-jumbo loan limit drop almost $140,000, from the current maximum of $729,750 to the new limit of $592,250.

In California counties where the cost of housing is high, Fremont Bank advocates homebuyers and current owners to act now. “With a precipitous drop in interest rates over the past few months and the imminent shift of the conforming-jumbo loan limit, California homebuyers are in a great position to capitalize on these extraordinary conditions, but the window will close soon,” said Brad Seibel, Fremont Bank’s director of residential lending.

Application volume for residential loans at Fremont Bank has increased. “We are seeing a large number of our clients take advantage of the low interest rates to pay off their loan quicker or choosing to refinance to a shorter term product — i.e. moving from a 30 year term, to 15 or 10 year term,” adds Seibel.

About Fremont Bank

Fremont Bank (www.fremontbank.com) is the leading full-service community bank in Northern California. Founded in 1964, Fremont Bank is one of the oldest independent family owned and managed banks in the region and focuses on personalized service for individuals and businesses. It serves communities through 19 branches and seven additional ATMs throughout the Greater Bay Area. Exceptional client service is the cornerstone of Fremont Bank’s business. Accommodation of customer needs in a friendly, personal atmosphere characterizes the Bank’s culture.