That FICO credit scoring monopoly is about to end after a July 8 announcement from Bill Pulte, director of the Federal Housing Finance Agency (the agencies’ conservator and regulator), allowing the mortgage giants to also use VantageScore.

“Effective today, to increase competition to the credit score ecosystem and consistent with President Trump’s landslide mandate to lower costs, Fannie and Freddie will ALLOW lenders to use VantageScore 4.0,” Pulte posted on X, formerly Twitter.

It’s a long time coming. The bipartisan Credit Score Competition Act was signed into law in 2018. Five FHFA directors later, Pulte moved forward with implementation.

When will these changes take place? Pulte didn’t provide a timeline, but a VantageScore representative said “soon” during a webinar I watched. Industry insiders expect it will take time to update all the guidelines.

VantageScore claims 2.7 million more mortgages will be generated in the market due to its model. The distinctions it claims are that it includes rent, utilities and telecom payments (which FICO does not include).

VantageScore also removes non-predictive data like medical collections, according to its webinar.

“VantageScores are more forgiving. Paid collections and unpaid collections are ignored,” said Mindy Leisure, director of credit education at Advantage Credit. “FICO, other than medical bills, weighs paid collections.”

Full disclosure: My firm does business with Advantage Credit.

Both scoring systems range from a low of 300 to a high of 850, according to John Ulzheimer, president of The Ulzheimer Group, a credit expert firm.

Below are the vague distinctions between FICO’s “weighing” and VantageScores’ levels of influence.

Weighted FICO scores are calculated using five information categories from your credit report:

—Payment history (35%)

—Amount owed (30%)

—Length of your credit history (15%)

—Mix of your credit accounts (10%)

—New credit accounts (10%)

VantageScore says it’s using five categories of information from credit reports. Instead of weighing, it describes a certain level of influence:

—Payment history (extremely influential)

—Total credit usage (highly influential)

—Credit mix and experience (highly influential)

—New accounts opened (moderately influential)

—Balance and available credit (less influential)

Fannie Mae and Freddie Mac are likely to adjust rates and points since these systems have different weightings. Industry jargon calls this Loan Level Pricing Adjustments or LLPAs.

We’ll note that just Tuesday, a judge in Texas removed a Biden rule through the Consumer Financial Protection Bureau that would have removed medical debt from credit reports. U.S. District Court Judge Sean Jordan cited the Fair Credit Reporting Act and said the CFPB is not allowed to remove medical debt from credit reports, per the Fair Credit Reporting Act.

Pricing new credit reports

For now, there are many questions about how the VantageScore system will work, including how much it will charge for its scores. A spokesperson declined to answer this week.

How much does FICO charge? The cost to industry mortgage originators in 2024 was $3.50 for each score. Each borrower receives three FICO scores — one from each of the three credit bureaus. FICO score prices soared to $4.95 each in 2025 (a 41% increase), according to Leisure. So that’s $15 for a consumer to get three credit reports.

Credit score fees are just part of the price to run credit. There is also the tri-merged credit report required by Fannie Mae and Freddie Mac. For example, a tri-merged credit report at my shop costs the consumer $94.

I’ll note that credit reports are not transferable so, borrowers can spend hundreds of dollars paying these credit report fees as they shop for a mortgage. It’s not uncommon for lenders to cover the credit report fee as a cost of doing business.

My hunch says some consumers will get hit with higher credit report/credit score charges from lenders, not lower costs, and with no consequential benefit.

In his FAQs on X, Pulte wrote in part: To promote robust competition and provide further flexibility for consumers and lenders, the Enterprises (F&F) will allow lenders to determine which credit score model to use on each loan they deliver.

In other words, they can pull both a VantageScore and a FICO score to see which one might increase the score for better consumer pricing. Remember that a failing score is 619 and a passing one 620. Yes, this could ultimately benefit some mortgage shoppers, even though the costs of the second credit report and scores are likely to be passed on to the consumer.

You cannot append a FICO score to a VantageScore credit report and visa-versa, according to Leisure. This means you must run another credit report. That means Transunion, Equifax and Experian get to double dip on credit report charges.

As an aside, FICO is a standalone company. VantageScore is owned by the three major credit bureaus Experian, Equifax and TransUnion.

One consumer advocate said the addition of VantageScore would only muddy the waters for borrowers.

In an interview with USA Today, Chi Chi Wu, director of consumer reporting and data advocacy at the National Consumer Law Center, said VantageScore is an extension of a credit score monopoly.

“The big three credit bureaus are basically a functional monopoly,” Wu said. “If you want a mortgage, you have to pull all three reports. You have no choice. They created VantageScore to try to drive FICO out of the market because they want the whole market. FICO is the only independent actor.”

What do the FICO folks think about this? In part: “The Federal Housing Finance Agency’s interim “lender choice” policy introduces a dangerous precedent that increases adverse selection risk that will raise prices for consumers. Further, it inexplicably favors a less predictive credit score that will undermine the safety and soundness of the enterprises and their counterparts, and damage liquidity in the $12 trillion mortgage industry.”

The FHFA, Fannie Mae and Freddie Mac did not respond to requests for comment.

Freddie Mac rate news

The 30-year fixed rate averaged 6.75%, 3 basis points higher than last week. The 15-year fixed rate averaged 5.92%, 6 basis points higher than last week.

The Mortgage Bankers Association reported a 10% mortgage application decrease compared with one week ago.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $806,500 loan, last year’s payment was $11 more than this week’s payment of $5,231.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.875%, a 15-year conventional at 5.5%, a 30-year conventional at 6.375%, a 15-year conventional high balance at 5.875% ($806,501 to $1,209,750 in LA and OC and $806,501 to $1,077,550 in San Diego), a 30-year high balance conventional at 6.625% and a jumbo 30-year-fixed at 6.5%.

Eye-catcher loan program of the week: A 40-year fixed rate mortgage, interest-only for the first 10 years at 6.625% with 1 point cost.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com

Let us count the ways.

First and foremost, the 2017 Tax Cuts and Jobs Act temporarily capped state and local tax deductions or SALT at $10,000. SALT is a federal tax provision that allows taxpayers who itemized their deductions to subtract state income taxes and local property taxes from their adjusted gross income for 2018 through 2025.

Folks in high housing cost states like California, New York and New Jersey were none too happy because in many cases, homeowners could not fully deduct their state income taxes along with their property taxes given the $10,000 cap.

Under OBBBA, the SALT cap temporarily increases to $40,000 per year so long as your annual income does not exceed $500,000. This $40,000 cap grows annually by 1% for inflation until it “snaps back” to $10,000 after five years or through 2029.

CBIZ CPA and managing director Warren Hennagin offers the following example:

Take a $1 million property. At a 1% tax rate that’s $10,000 per year of property taxes. Assume the homeowners earn $200,000 per year at a 10% California income tax rate. That’s $20,000 of state tax. Under the $10,000 SALT cap, the $20,000 state income tax cannot be deducted against federal income tax along with the property taxes because they would add up to $30,000.

Under the new $40,000 cap, you can take the $20,000 of state income tax, multiple that by 30% (assumed federal tax rate) which saves you another $6,000 in addition to the $3,000 property tax deduction.

Private mortgage insurance or PMI is next on the winners list.

OBBBA reinstates and makes permanent the deductibility of private mortgage insurance premiums. This means borrowers can deduct their PMI premiums from their federal income taxes. PMI has not been deductible since 2021.

PMI insurance also includes Federal Housing Agency or FHA mortgage insurance as well as any Department of Veterans Affairs or VA funding fee.

For example, take a $700,000 sales price, assuming a 700 middle FICO score, 22% tax bracket with minimum required down payments and zero down in the case of VA:

I’ll note here that FHA mortgages have both a one-time upfront mortgage insurance premium charge of 1.75% of the base loan amount. In addition, there is a monthly mortgage insurance premium which is 0.55% for most mortgages.

—$15,517 is the total upfront mortgage insurance premium and monthly mortgage insurance for one year on an FHA mortgage; that means an approximate $3,414 tax deduction

—$2,988 is the total PMI for one year on a conventional mortgage, a $657 tax deduction

—$15,050 is the total of the VA funding fee for one year, or a $3,311 tax deduction

The actual PMI tax deductibility will be subject to individual tax bracket income limits (caps), which were not available by press time.

Next is 100% bonus depreciation for certain qualifying properties. It makes permanent full expensing for new capital investments. We’re talking about rental properties.

You will continue to be able to write off repairs in the year they were done. What changes are matters like air conditioning, cabinetry and carpeting. Now, you will be able to write 100% of the cost off in the year the work was done, according to Hennagin. Capital improvements like a room addition will continue to be depreciated 27.5 years for residential and 39 years for commercial properties.

How about mortgage interest deduction? The bill permanently caps eligible mortgage acquisition debt at $750,000, including HELOCs. 

Rate and term refinances (no cash-out) are also considered mortgage acquisition debt, according to Hennagin. If you do a cash-out refinance, any cash-out not used for home improvement is not deductible. That would also be true of getting cash-out on for any rental property.

As an aside, the fact that tips up to $25,000 and overtime up to $12,500 are eligible for a tax refund, which should help first-time buyers. 

“The tax benefits, particularly overtime and tips, plus the SALT expansion, may give that extra financial boost so important to first-time homebuyers and affordability,” said Brad Seibel, chief investment officer, Sage Home Loans.

Also, I will note that the benefits mentioned in this column will not help borrowers to mortgage qualify, per se, but they might help paychecks by adding more take home pay through savvy deductions at tax time.

The Big Beautiful Bill will add an estimated $4 trillion to the nation’s federal deficit from overall tax cuts and interest costs, according to calculations by the Congressional Budget Office and the Cato Institute. A higher national deficit is often blamed for higher inflation, slower growth and higher interest rates.

Freddie Mac rate news

The 30-year fixed rate averaged 6.72%, 5 basis points higher than last week. The 15-year fixed rate averaged 5.86%, 6 basis points higher than last week.

The Mortgage Bankers Association reported a 9.4% mortgage application increase compared with one week ago.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $806,500 loan, last year’s payment was $91 more than this week’s payment of $5,215.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.75%, a 15-year conventional at 5.375%, a 30-year conventional at 6.25%, a 15-year conventional high balance at 5.75% ($806,501 to $1,209,750 in LA and OC and $806,501 to $1,077,550 in San Diego), a 30-year high balance conventional at 6.5% and a jumbo 30-year-fixed at 6.375%.

Eye-catcher loan program of the week: A 40-year fixed rate mortgage, interest-only for the first 10 years at 6.5% with 1 point cost.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com.

Why now? Well, the housing market is on ice with many owners reluctant to leave their homes. Why would anybody want to move now and double their interest rates? Or watch their property taxes soar with a change of address?

But for those who must move and are looking for help in between a sale and a purchase, a bridge loan might be for you.

So, what is a bridge loan?

Also known as a swing loan, a bridge loan is a short-term financing instrument allowing a home seller to tap their home equity before the home is sold. Those tapped-out funds are used as a down payment on the replacement property. It’s a short-term solution that bridges a liquidity gap, facilitating the purchase of the replacement home before the departing residence is sold.

Whether the homeowners are stepping up in price or stepping down, most are anxious and uncertain about being able to find the right replacement property before selling their departing residence.

This is a way to avoid asking the seller for the contingency of waiting for the departing residence to sell. This solution avoids double-moves (sell, short-term rental, buy). It’s also a great way to compete with cash buyers and an array of non-contingent buyers.

Rocket’s bridge loan — available only directly to customers and not through mortgage brokers like me — gives clients up to six months to sell their home, with interest-only payments throughout that period. To qualify, clients must have their home listed, be under contract with a listing agent or have a guaranteed buyout agreement in place. The client must have an associated Rocket Mortgage purchase loan to be eligible, according to its June 24 press release.

Now, let’s get to the other issues: costs, points, interest rate, risk, qualifying and the like.

Rocket did not respond to requests for comment.

Other lenders typically require the bridge loan against your departing residence to be in first lien position. What that means is if you have a current mortgage or mortgages against your property, those would be required to be refinanced into the bridge loan. For example, let’s say you are pulling out $500,000 for the replacement residence down payment. And you also currently owe $300,000. That means you’ll be paying points and settlement charges on $800,000, not $500,000.

Obviously, there are expenses to refinancing into a bridge loan in respect to your departing residence. Generally, it’s 1 to 3 points (each point is 1% of the loan balance so 2 points on a $500,000 loan would be $10,000). The interest rate is in the 9% range.

You will also be charged an origination fee for the mortgage on the replacement property, roughly 1 to 2 points. This is just like any other purchase mortgage, except the interest rate is likely to be higher than typical rates on the take-out mortgage. Say you can get 6.25% on a regular mortgage. Attached to the bridge loan the interest rate could be 7.25% or 8.25%. The rate depends on your lowest middle FICO score and your down payment percentage (in industry parlance this is called loan-to-value).

You’ll need at least 25% remaining equity in your departing residence after you pay off existing liens, pull the cash out and pay closing costs. For example, say your home is worth $1 million and you have an existing mortgage of $300,000. You want to pull out $435,000. Closing costs are $15,000. You would have $250,000 of remaining equity, which meets the loan-to-value requirements.

On the replacement purchase side, you will need to put at least 20% down. These are Rocket’s terms, by the way.

The risk you are inheriting in a bridge loan is its temporary financing. The term of a bridge loan is six to 12 months. That means you have a balloon payment due at the end of the timeline, whether you’ve sold your departing residence or not. If you don’t cough up the funds, you could be facing foreclosure.

The key to making all of this work is properly pricing your departing residence. If you have a fairly priced, clean property, you are not going to have a problem selling it with those timeline constraints.

Qualifying is another issue. Remember, lenders will hit you for the interest-only payment, taxes, insurance and any association fee on the departing residence, in addition to the total house payment on your replacement property.

Lendsure, a so-called non-QM (qualified mortgage), offers a one-year bridge loan with no payments on the soon-to-be departing residence. The interest rate still accrues but without monthly payments, making it easier to qualify. The accruing interest is owed when the bridge loan is paid off.

In the past three years, most of the sellers in my experience have been moving because of a death, divorce or job transfers. Now, I am seeing more folks who are choosing to sell who just want to get on with their life, regardless of their low mortgage rate and low property taxes. A bridge loan is a good but expensive way to get you into the place you really want.

Full disclosure: My firm does business with Rocket Mortgage and Lendsure.

Freddie Mac rate news

The 30-year fixed rate averaged 6.67%, 10 basis points lower than last week. The 15-year fixed rate averaged 5.8%, 9 basis points lower than last week.

The Mortgage Bankers Association reported a 2.7% mortgage application increase compared to one week ago.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $806,500 loan, last year’s payment was $150 more than this week’s payment of $5,189.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.75%, a 15-year conventional at 5.375%, a 30-year conventional at 6.25%, a 15-year conventional high balance at 5.875% ($806,501 to $1,209,750 in LA and OC and $806,501 to $1,077,550 in San Diego), a 30-year-high balance conventional at 6.625% and a jumbo 30-year fixed at 6.5%.

Eye-catcher loan program of the week: A 40-year fixed rate mortgage, interest-only for the first 10 years at 6.625% with 1 point.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com.

In the interest of privacy, I’m not disclosing their names. So, for the purposes of this column, I’m calling them Mr. and Mrs. Jones.

The Joneses didn’t want to touch their low 3.25% first mortgage interest rate.

Also see: Southern California homeowners have $1.645 trillion of tappable equity

So, they applied for a home equity line of credit through their bank. Wells Fargo turned them down because their debt ratio was too high (total of house payment plus other bills, divided by monthly gross income).

They turned to a home equity investment company or home equity contract company with a somewhat novel program called home equity contract (HEC) or home equity investment (HEI).

In exchange for 49% of their future property appreciation, the contractor offered an upfront lump sum of cash requiring no monthly payments and no accruing interest.

“We desperately needed the money, so we took it,” the Mr. Jones told me. “It was the only game in town.”

Here are the basics of the Jones’ deal. By appraisal, the HECC concluded the value in 2020 to be $996,000. The HECC required the couple to take a $142,000 haircut on the value (That’s the $142,000 lump sum the HECC gave to the Joneses.) So, the initial recognized value — in exchange for 49% of the appreciation — was $854,000.

The Jones are now downsizing, selling their home for roughly $1,650,000 or roughly a 65% gain.

Assuming a $1,650,000 sales price, minus the starting value at $854,000, the property appreciated $796,000 in five short years. This means the HECC will receive $390,040 for its $142,000 bet on the Joneses property appreciation. That’s a 275% return on investment, or nearly triple. Holy Toledo! 

In all, the Joneses went back to negotiate for a smaller split to the HECC firm. Their Realtor estimated they’d have about $600,000 when everything was paid off. Their annual appreciation rate was about 10.5%. In addition, the Joneses paid $3,000 in closing costs for the original HEC.

The amount of appreciation the HECC company gets varies by firm. For example, Point offers homeowners protection cap of 17% to 19% appreciation annually, according to Shoji Ueki, its chief growth officer.

Hometap, another HECC company, ensures its return will never exceed a 20% annual rate, says Jonathan MacKinnon, senior vice president of product strategy and business development.

I polled several HECCs to get a sense of the program parameters. In general:

—Borrowing amounts are as low as $30,000 to as high as $500,000

—FICO scores can be as low as 500 and no income qualifying

—No age restrictions (you don’t have to be 62 as for a reverse mortgage)

—All allow owner-occupied contracts, some allow second homes, investment properties and one to four units.

—The maximum combined loan to value can vary (minimum remaining equity after the considering the lump sum payment)

—Points charged vary from 0 to 5 points (each point charged is 1% of the borrowed funds, i.e. $250,000 at 4 points is $10,000), plus escrow and title insurance type charges of roughly $2,000 to $4,000

—You must pay all the funds back at once

—No prepayment penalty

—Terms are generally 10 to 30 years

—Early payback triggering events are the home sale, home refinance or by homeowner’s choice (such as they came into money and just want to pay the funds back)

—Typically, the sales price will be the value used to measure property appreciation. Absent a sales price, then an appraisal will determine the value

According to the Consumer Financial Protection Bureau, the first home equity contract company started in 2006. In the first 10 months of 2024, the four largest home equity contract companies securitized approximately $1.1 billion backed by about 11,000 home equity contracts (averaging $100,000 per home). Still, this is an emerging market, given the small amount of fundings.

CFPB complaints shows homeowners felt frustrated and misled about various aspects of home equity contracts, including confusion about financial terms, surprise at the size of the repayment amounts, disputes about appraisal values, difficulty refinancing due to the existence of a HEC and frustration that they felt their only option to get out of the contract was to sell their home.

Truth be told, homeowners have become so overprotected through regulations on traditional mortgages, that the poorly qualified “borrowers” are between a rock and a hard place. Lousy credit and/or little or no income make it almost impossible to cash out.

HECs offer a viable way to tap equity without having to sell your property or add to your mortgage payment pressure. Just like reverse mortgages, HECs should be a “loan” of last resort. Think of it this way: Is it better to give up some appreciation than to be forced to sell your home?

This novel financing is virtually unregulated, though. One source told me there are no federal regulations or consumer protections.

If the product is being offered as a contract, and not a loan, then a broker license would likely be required; however, there are no specific disclosures required because the product is not a “loan,” according to Christina Jimenez, assistant commissioner of communications and publications at the California Department of Real Estate.

If you are considering a home equity contract, you must shop around. I was getting dizzy listening to all the nuances each home equity contract company was offering.

Just google “home equity investment” or “home equity contract.” You’ll find plenty of companies. You should create a spreadsheet to be able to properly compare.

Separately, I strongly advise you to have an attorney review the terms and explain them to you in simple English before signing anything.

Freddie Mac rate news

The 30-year fixed rate averaged 6.84%, 1 basis point lower than last week. The 15-year fixed rate averaged 5.97%, 2 basis points lower than last week.

The Mortgage Bankers Association reported a 12.5% mortgage application increase compared to one week ago.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $806,500 loan, last year’s payment was $59 more than this week’s payment of $5,280.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.875%, a 15-year conventional at 5.5%, a 30-year conventional at 6.375%, a 15-year conventional high balance at 5.99% ($806,501 to $1,209,750 in LA and OC and $806,501 to $1,077,550 in San Diego), a 30-year high balance conventional at 6.75% and a jumbo 30-year-fixed at 6.5%.

Eye-catcher loan program of the week: A 40-year fixed rate mortgage, interest-only for the first 10 years at 6.625% with 1 point cost.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com.

Tappable equity means there is at least 20% equity in the property. For example, a $1 million home would have at least $200,000 of equity after any liens are considered.

Let’s drill down on tappable equity in California.

Statewide, homeowners have $3.269 trillion of such equity. That’s 28.1% of the nation’s $11.5 trillion in tappable equity.

Also see: How much wealth have Californians amassed?

Southern California homeowners in Los Angeles, Orange, Riverside, San Bernardino and San Diego counties have $1.645 trillion in this equity. That’s 50.3% of the state’s overall and 14.3% of the nation’s.

“California remains the epicenter for home equity lending opportunities with 28% of all equity nationwide residing in the state and nearly 10% of all equity held in the Los Angeles (and Orange County) market alone,” said Andy Walden, head of mortgage and housing market research at Intercontinental Exchange. “The average Los Angeles mortgage holder has more than $630,000 in tappable equity available to borrow against while maintaining a 20% equity cushion.”

San Jose leads the state with an average $850,811 in tappable equity per borrower. The Los Angeles/Orange County metro area is second with $634,893 per average borrower. San Diego County is at $513,456, and the Inland Empire $226,994.

Demand has increased in the first quarter of the year, with $45 billion of equity withdrawals nationwide — the highest Q1 volume since 2022, according to Intercontinental Exchange.

Also see: Southern California home prices rise even as buying sputters

Before I get you into a lather about all the ways you can tap your home equity, let’s talk about need versus want.

Here are some good reasons to tap that equity: You carry substantial credit card debt with high interest rates, want to do home improvements or make a down payment on a rental property.

The wrong reasons: Paying for a vacation or want some mad money, for example.

Again, do you really need the money, or do you just want the money? Do not think about your home equity as a piggy bank. That’s a slippery slope.

As an aside, it is an excellent idea to put a home equity line-of-credit against your home just to have it there in case of emergency. For example, say you unexpectedly lose your job. Having the HELOC at the ready can be a blessing. If you try to qualify for a HELOC after losing your job, you won’t get approved.

It’s also important to know whether the home equity you tap out is tax deductible.

The interest is currently tax deductible if the funds are used to buy, build or substantially improve the home that secures the loan (renovations or improvements). You can deduct interest on loans up to $750,000 for married couples filing jointly, and $375,000 for married couples filing separately. This limit includes all residential debt, such as mortgages and home equity loans, according to Jeff Hipshman, a certified public accountant and partner at Eide Bailly.

More than 60% of all U.S. homeowners who hold mortgages have a mortgage rate under 4%. Thank you, Covid and Jerome Powell. Few want or need to refinance their first mortgage, especially with current rates hovering around 6% to 7%.

So, many folks I talk to are looking at second loans, of which there are two kinds.

One is the previously mentioned HELOC. The interest rate for this loan adjusts based on the prime rate and a profit margin added to that rate. The HELOC typically allows for minimum, interest-only payments for the first 10 years. You also can borrow and pay it back in those first 10 years, just like a credit card. The remaining, say 20 years, requires amortizing the remaining balance on your monthly payments.

The other is a HELOAN or home equity loan, which is a fixed-rate second lien. You are required to take all the money out at once. The interest rate is fixed, and the balance is amortized over the term of the loan. HELOANS are typically amortized over 15, 20 or 30 years.

HELOCs can go up to 95% combined loan-to-value. For example, say your home is worth $1 million. You owe $600,000 on your first mortgage. You could get up to $350,000 on a HELOC, totaling $950,000 of liens.

Home equity loans can go to 90% combined loan-to-value.

Qualifying is like the Wild West. You can use tax returns and W-2s to qualify. For the self-employed you can also qualify based on bank deposits.

You can do owner-occupied second liens or non-owner occupied second liens.

The lowest middle FICO credit score of all borrowers can go as low as 640 on HELOCs and 680 for home equity loans.

HELOC rates range from prime only (currently at 7.5%) to 13%, depending on your combined loan-to-value and FICO score, occupancy type (primary, second home or investment property) and property type (condos, single family or 1-4 units).

Home equity loans can be had as low as 6.875% to 14%, again, depending on the same parameters as HELOANS.

Freddie Mac rate update

The 30-year fixed rate averaged 6.85%, 4 basis points lower than last week. The 15-year fixed rate averaged 5.99%, also 4 basis points lower than last week.

The Mortgage Bankers Association reported a 3.9% mortgage application decrease compared with one week ago.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $806,500 loan, last year’s payment was $76 more than this week’s payment of $5,285.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.875%, a 15-year conventional at 5.625%, a 30-year conventional at 6.375%, a 15-year conventional high balance at 5.99% ($806,501 to $1,209,750 in LA and OC and $806,501 to $1,077,550 in San Diego), a 30-year high balance conventional at 6.75% and a jumbo 30-year-fixed at 6.625%.

Eye-catcher loan program of the week: A 40-year fixed rate mortgage, interest-only for the first 10 years at 6.625% with 1 point cost.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com.

“No offers and not in a position where I have to move, so no need to do something desperate and continue to lower our price,” Kirkreit told me. “It certainly seems like the inventory has changed the market to favor the buyer.”

March, which typically sees more than 20,000 closings a month in Southern California, was the third-slowest sales tally for that month in 20 years. The region saw just 13,883 homes change hands. Active listings rose to 46,000 in March, according to Redfin.

Also see: Home prices take 1st drop in 26 months, by this math

It’s been seven years (2018) since we’ve had any whiff of being a buyer’s market. Even though mortgage rates are still high, maybe now is the time for would-be buyers sitting on the sidelines to jump in.

To that end, I have cobbled together some buyer tips and best practices from local Realtors with the hope that they will benefit today’s home shoppers.

Full disclosure: I do business with some of these agents.

Also see: 29% fewer California homes sold. Is the Fed to blame?

Robyn Seymour, broker owner of Seasonz Real Estate

—When seeking an agent, ask them which city or area is their focus. For example, if you are looking in Riverside, a Pasadena agent might not be a good fit.

—Ask the agent if he or she offers any guarantees. If so, what are they?

—Ask the agent how many transactions he or she completed last year and this year. Experience is key.

Bram Klein, agent Keller Williams

—Find a proactive agent who doesn’t just focus on the multiple listing service. Find someone with investigative skills, who has a knack for being willing to dig and door knock in neighborhoods you desire in order to find willing off-market sellers.

—Have the agent carefully walk you through the entire purchase agreement, which reduces fear.

Phil Immel, broker associate, Pacific Sotheby’s

—Friends and family are great for many wonderful things. However, don’t rely on them as advisers for your real estate matters. Rely on a licensed professional.

Linda Battisti, broker associate, Remax Property Connection

—Find out if the seller is open to seller financing. You might get a substantially lower rate than a commercially available mortgage.

—Make sure you understand the sellers’ motivation. Price may not be the primary motivation. Maybe it’s a shorter escrow or allowing for a contingency.

—Go to the neighborhood you are considering at different hours of the day to learn about any neighborhood noise and traffic patterns.

Janine Stratton, agent, Pacific Sotheby’s

—Get a second opinion from a different mortgage lender. Have a backup option.

—Consult with the lender ahead of making an offer in respect to what types of financing options are available for various condo complexes (FHA, VA, conventional, etc.).

Cara Ameer, agent, Coldwell Banker

—Be reasonable when it comes to turnkey properties. This means you don’t go for the jugular with low-ball offers.

—Have realistic expectations about properties in your price range. If you are buying for location, you might have to sacrifice condition. Lower your expectations to reality.

Brandi Brotherton, agent, Berkshire Hathaway

—Buyers need to know what they are going to pay for homeowners’ insurance as early as possible. In today’s market we are dealing with insurance sticker shock.

—If you are asking for the sale to be contingent on you selling your property, give the sellers what they want in terms of list price.

My suggestions are the following… 

—Find the most knowledgeable property inspector possible. Interview with at least three inspectors before you pick one. Clients sometimes complain about X problem after the escrow closes. It tends to be matters the inspector missed and the seller did not disclose.

—Never waive your contingencies at the onset (mortgage approval, home inspector, appraiser, termite inspector, finding insurance). Only remove your contingencies once you are satisfied and you get the all-clear from your lender.

—Get recommendations from those close to you regarding real estate agents. Interview three agents. Pick the agent who is the best fit for your needs and your personality. Who are you most comfortable with?

Freddie Mac rate news

The 30-year fixed rate averaged 6.86%, 5 basis points higher than last week. The 15-year fixed rate averaged 6.01%, 9 basis points higher than last week.

The Mortgage Bankers Association reported a 5.1% mortgage application decrease compared with one week ago.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $806,500 loan, last year’s payment was $43 more than this week’s payment of $5,290.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 6.125%, a 15-year conventional at 5.75%, a 30-year conventional at 6.625%, a 15-year conventional high balance at 6.125% ($806,501 to $1,209,750 in LA and OC and $806,501 to $1,077,550 in San Diego), a 30-year high balance conventional at 6.99% and a jumbo 30-year-fixed at 6.75%.

Eye catcher loan program of the week: A 40-year fixed rate mortgage, interest-only for the first 10 years at 6.75% with 1 point cost.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com.

Plan to stay in a home purchase eight to 10 years if you are buying in this market

Mortgage headwinds remain stubbornly high with this week’s Freddie Mac rate at 6.86%. Southern California home prices remain near all-time highs. Home sales are slowing, with March 2025 the third slowest March on record, according to Attom.

Every major California market now has at least 40% more homes available for sale than at the same time last year in May, according to Intercontinental Exchange. If current trends persist, we could see prices fall year over year in even more West Coast markets.

Also see: State Farm seeks 30% overall hike for California home insurance policies

This leaves any rational buyer to wonder about market timing.

—Do I pull the trigger now?

—Do I wait for interest rates to curtail?

—Do I wait for home prices to drop?

—Or does short-term timing really matter at all if I plan on staying for the long hall?

More on mortgages: 714 is typical Californian’s credit score. How does that rank?

“If you don’t own, you need to,” said Pat Veiling, president and founder Real Data Strategies. “You should plan on staying in what you buy for eight to 10 years. You don’t want to buy and then regret your time horizon if you are forced to sell at a bad time. If the market turns south, you can (should be able to) live through it.”

For example, say you are getting married. It’s not a good idea to buy a one-bedroom if you plan on having children in the near term as you will quickly outgrow what you purchased. Selling and buying (in terms of transaction costs) can be expensive.

Or, what if the economy hits a recession and property values fall. You want to be able to ride out the downturn in the same home.

“I see downward pressure on pricing. One property went from $539,000 to $529,000 to $500,000,” said John Schantz, a broker associate at Harcourts. “I feel prices are coming down, for sure.”

Full Disclosure: I do business with Schantz.

Lending market: Trump cuts at Fannie Mae, Freddie Mac may slow housing, report says

First-time buyers

The median age of a first-time homebuyer is 38, an all-time high. The first-time buyer market share is at a historic low of 24%, according to 2024 data from the National Association of Realtors.

We’re not quite at the point of homebuyer’s advantage (being a buyers’ market compared with a sellers’ market), but at least we’re trending toward market equilibrium — much more so than we have been in years.

This means more choices for home shoppers.

Below are some inventory statistics from Steven Thomas, chief economist at Reports on Housing.

Listings: mid-May 2025 compared with mid-May 2024

— Southern California: 38,997 vs 25,733 last year

— Orange County: 4,575 vs 2,649 last year

— Los Angeles County: 13,855 vs 9,612 last year

— Riverside County: 8,649 vs 5,719 last year

— San Bernardino County: 6,121 vs 4,168 last year

— San Diego County: 5,797 vs 3,585 last year

Expected market time (until the property goes into escrow)

—Southern California: 107 days vs 67 last year

—Orange County: 86 days vs 47 last year

—Los Angeles County: 112 days vs 72 last year

—Riverside County: 114 vs 74 last year

—San Bernardino County: 118 days vs 79 last year

—San Diego County: 94 days vs 56 last year

Beyond 120 days on market is considered a buyers’ market, according to Thomas.

Here’s a fun fact from Thomas: There were 18,000 homes for sale in 2007 during the Great Recession compared with 4,575 in Orange County today.

Contingent move-up buyers

Something I haven’t seen in a long time, but I am starting to see again are contingent buyers. A contingent deal means a home seller agrees to wait until the buyer sells their existing home.

That contingent opportunity is opening as the number of homes available for sale continues to climb.

The move-up buyer tends to be torn between walking away from the low 2% or 3% mortgage rate, and a low property tax base compared with needing larger quarters for a growing family.

What about the older crowd of Baby Boomers and Generation X looking to make a move?

The median age of all buyers in 2024 was 56 years old, according to NAR. The typical home seller was 63 years old in 2024.

“Boomers are selling to and buying from boomers. Houses are bigger than what they need,” said Veiling. “They have the equity to perform in today’s market.”

Boomers moving down may be able to take their property tax base with them. And they are more likely to be paying cash for the new pad. So, interest rates may not matter.

If you are thinking about making a move, I’d heed Veiling’s advice. Plan for the long-term. Real estate is about to get choppy.

Freddie Mac rate news

The 30-year fixed rate averaged 6.86%, 5 basis points higher than last week. The 15-year fixed rate averaged 6.01%, 9 basis points higher than last week.

The Mortgage Bankers Association reported a 5.1% mortgage application decrease compared with one week ago.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $806,500 loan, last year’s payment was $43 more than this week’s payment of $5,290.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 6.125%, a 15-year conventional at 5.75%, a 30-year conventional at 6.625%, a 15-year conventional high balance at 6.125% ($806,501 to $1,209,750 in LA and OC and $806,501 to $1,077,550 in San Diego), a 30-year high balance conventional at 6.99% and a jumbo 30-year-fixed at 6.75%.

Eye-catcher loan program of the week: A 40-year fixed rate mortgage, interest-only for the first 10 years at 6.75% with 1 point cost.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com.

Because this expo wasn’t open to the public, I’m not going to name the lenders. Ask your mortgage originator for details if you are intrigued by any of them.

Number one on my list is a loan program for condo complexes short on master insurance coverage.

Typically, these are complexes blacklisted by Fannie Mae for not having 100% insurance replacement coverage, also known as non-warrantable condos.

In this case, the lender may fund purchases and refinances where the insurance coverage runs short. This is a big deal, with hundreds of complexes being added to Fannie Mae’s unavailable list each month.

Mind blowing is another loan program not requiring the source of funds for large bank deposits. Large bank deposits are considered larger than a paycheck.

For example, say you are buying a $1 million property. You deposit $500,000, provided by someone else, into your bank account. You use the $500,000 as the down payment, making your loan amount $500,000.

Was this a gift from someone? Was it a loan? Are you a straw buyer for someone who is not worthy enough to be approved for this amount of mortgage credit? Was it money laundering?

These are the typical concerns when we see large deposits. Lenders require a paper trail on the money and a letter of explanation … but not with this particular program.

Here’s another interesting loan program: No seasoning for someone new going on the title. In other words, you can be added to the title today and get a new cash-out loan tomorrow.

This usually occurs with a close family relationship.

Say, somebody wants to give/sell the property to someone else. Instead of going through the larger expense of a purchase escrow, or maybe the seller/donor’s income is needed to help the property recipient qualify, they just add the buyer or gift recipient to the title, then take out a new loan.

Afterward, the seller/donor is removed from title via a quit-claim deed.

Keep in mind, if you transfer property as a refinance, you may still be reassessed, according to the Orange County Assessor’s office.

As it concerns the possibility of federal income tax, check with your tax adviser to make sure this is kosher with the IRS.

Another creative program uses the highest credit score of all borrowers as the basis for loan pricing. Normally, lenders use the lowest middle FICO score of all borrowers.

For example, let’s say a homebuyer has a 500 middle FICO score. It’s too low, so the borrower would need somebody to help them qualify. In this case, that somebody does not have to occupy the property in question. That somebody has an 800 middle FICO score. And, that somebody makes more income than you. You will get excellent mortgage pricing using the 800 score. With a 500 score, you’d be rejected outright for not meeting minimum standards.

Something else. Let’s say you are a big-time real estate investor with low mortgage rates on your existing rentals. Obviously, you don’t want to mess with refinancing from a lower rate to a higher rate.

I found a non-owner occupied second mortgage that goes up to $500,000 cashout. Qualifying is based on not having negative rents.

In other words, the rents your tenant pays must be $1 more than the total of your house payments (first and second lien, plus monthly property tax, insurance and any HOA) on the rental property. Conceivably, you can leverage $500,000 of equity from each rental property to buy more rentals, assuming you have substantial equity in the properties.

For fix and flip fans, one lender is willing to go with just 10% down on the purchase price. In the past, I’ve seen lenders ask for 20%-25% of the purchase price.

How about a borrower without any FICO credit scores? One lender will arrange funding for that borrower, so long as they are putting 35% down.

Another lender is willing to fund non-warrantable (Fannie Mae won’t lend) condos with just 10% down. Typically, non-warrantable condos require 20% down.

I found a lender willing to fund assisted living homes and vacation rentals. Another lender is willing to make raw land loans with just 35% down.

I left the expo totally enamored with all the creative financing tools available for mortgage shoppers.

If a mortgage lender tells you that you can’t qualify, make sure you contact at least two other lenders. Don’t stop trying unless you are getting the same rejection answer from at least three lenders.

Freddie Mac rate news

The 30-year fixed rate averaged 6.81%, 5 basis points higher than last week. The 15-year fixed rate averaged 5.92%, 3 basis points higher than last week.

The Mortgage Bankers Association reported a 1.1% mortgage application increase compared to one week ago.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $806,500 loan, last year’s payment was $114 more than this week’s payment of $5,263.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.99%, a 15-year conventional at 5.625%, a 30-year conventional at 6.5%, a 15-year conventional high balance at 6.125% ($806,501 to $1,209,750 in LA and OC and $806,501 to $1,077,550 in San Diego), a 30-year-high balance conventional at 6.875% and a jumbo 30-year fixed at 6.75%.

Eye catcher loan program of the week: A 40-year fixed rate mortgage, interest-only for the first 10 years at 6.75% with 1 point cost.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com.

You have lots of choices when it comes to financing a home, from loan programs, a span of interest rates and price options.

You should be aware the mortgage world is comprised of four types of lenders: depositories, mortgage bankers, mortgage brokers and private money lenders.

Which one of these might be a better fit for you? I am going to explain the general strengths and weaknesses of each type of lender. Hopefully, this will give you some ideas where to shop for your best deal.

Depositories

Depository lenders are banks and credit unions.

Oftentimes, they will use depositor funds to loan out mortgages. Perhaps they pay depositors 3.5% interest and offer mortgages at 6%. If and when they do that, you might be able to find cheaper pricing because the depositories are able to dictate the rates instead of relying on the secondary mortgage market — the likes of Fannie Mae and Freddie Mac, for example.

Typically, the cheaper pricing is for jumbo sized loans: more than $806,500 in the Inland Empire and more than $1,209,750 in Los Angeles and Orange counties.

Some banks offer an interest rate reduction for every X amount of liquid assets you bring to the table.

For example, say the rate is 6% and you have $250,000 in bank deposits, which might reduce the rate to 5.75%. Bring more than $1 million, and you might get a 5% interest rate.

While not all banks do this, the ones that do home equity lines-of-credit tend to offer them without closing costs.

On the downside, depository lenders tend to underwrite conservatively. So, if you have poor credit, job instability, a high ratio of total debt (house payment compared with your income) or you have difficulty proving your income via tax returns and the like, a depository lender might not be right for you.

Depositories have a more limited mortgage menu compared with mortgage bankers and mortgage brokers.

Mortgage bankers

Mortgage bankers are also known as non-bank or non-depository (bank) lenders. Mortgage bankers originate, underwrite and fund loans. They don’t accept deposits like traditional banks and credit unions do.

The wheelhouse for mortgage-banker financing are the conventional, FHA and VA loans.

Mortgage bankers tend to take on a wide range of borrowers, those with strong credit and income, or not.

Mortgage bankers tend to be less limited than depositories but more limited than mortgage brokers, considering the financial instruments they can offer. Their jumbo pricing may not be as good as you might find at a bank.

Mortgage brokers

Like an insurance broker with several lines to sell, mortgage brokers have the widest menu of mortgage loan programs.

They act as an intermediary between consumers and wholesale lenders. They may arrange conventional loans, FHA and VA, jumbo loans, exotic loans, second mortgages, reverse mortgages and private money or hard money loans.

Strong borrowers and weak borrowers are all in play here.

Mortgage brokers are the lowest cost (to produce a loan) providers because they do not have the typical layers of overhead found at depository institutions and non-bank lenders.

Borrowers who shop through mortgage brokers tend to do it because the broker finds a better deal for them than they can find on their own.

Most mortgage brokers do not have access to aggressively priced jumbo loans as most banks don’t accept wholesale business from brokers.

Private money lenders

Private money lenders are also known as hard money lenders.

Typically, their rates and points are significantly higher than other lenders,mainly because their borrowers can’t find traditional loan sources, for one reason or another.

Funds come from private investor sources focused on short-term loans. Private money lenders desire equity-rich properties as protection in the event the borrower defaults on the loan.

Private money lenders are famous for doing fix-and-flip home loans.

Conventional, government mortgages (FHA and VA) and jumbo loans will never be found through private money lender, so it’s a very narrow mortgage menu.

You should always shop with at least three lenders/mortgage brokers. Let each of them know you are shopping around.

Keep in mind the best price may not necessarily be the best deal. If the lender can’t fund the loan because you don’t meet its standards, then the pricing is worthless.

Service levels may be important as well. If you have a short deadline, you might want to go with a lender offering faster service but a higher price.

Reputation matters. Always get recommendations from people you trust — those who have had a good experience with lender X for example.

Freddie Mac rate news

The 30-year fixed rate averaged 6.76%, unchanged from last week. The 15-year fixed rate averaged 5.89%, 3 basis points lower than last week.

The Mortgage Bankers Association reported an 11% mortgage application increase compared with one week ago.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $806,500 loan, last year’s payment was $179 more than this week’s payment of $5,236.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.75%, a 15-year conventional at 5.5%, a 30-year conventional at 6.375%, a 15-year conventional high balance at 5.99% ($806,501 to $1,209,750 in LA and OC and $806,501 to $1,077,550 in San Diego), a 30-year-high balance conventional at 6.75% and a jumbo 30-year fixed at 6.625%.

Eye-catcher loan program of the week: A 40-year fixed rate mortgage, interest-only for the first 10 years at 6.75% with 1 point cost.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com.

Hopefully, the tips in this column will help you.

First, a brief explanation of a FICO credit score. The three-digit number reflects a person’s credit worthiness and debt default risk. Scores range from 300 to 850, with 850 being perfect credit and 300 being the worst possible credit.

If your middle FICO score is 740 or higher, that’s great. If the borrower enjoys a score of 800 or more, I always tell them they are next to God.

Also see: California home sales tumble below Great Recession low for 21 months

Weighting or calculating of the score is based on payment history (35%), amount of credit (30%), credit history (15%), and credit inquires and new credit accounts (10%).

Each person with enough established credit has three scores, one from each of the three major credit bureaus: Experian, Transunion and Equifax. The lowest middle-FICO score of all borrower applicants is typically the score lenders use.

Mortgage lenders price home loans based, in part, on a matrix that includes the percentage of down payment or percentage of equity (when refinancing) and the lowest middle-FICO score of all borrowers. The higher the score and the more down payment, the better the pricing.

For example, let’s say you were paying $1 million for a home and putting 20% down, which means a loan amount of $800,000. With a 740 middle-FICO your rate would be 6.5% with a principal and interest payment of $5,057.

In the same scenario with a 640 middle-FICO score, the rate would be 6.875% with a $5,255 monthly principal and interest payment. The monthly payment difference is $198.

Multiply that by 360 payments or 30-years, you would be paying $71,280 more if your score was 640. It really does pay to boost lower credit scores.

Something else to note: One point can make the difference between approval and denial. If your middle FICO score is 619, you will be denied for a conventional loan because the minimum required FICO is 620.

First and foremost, find out your middle-FICO credit score. Your mortgage loan originator can run your credit and get the scores. Credit reports have become crazy expensive. Some lenders absorb the cost of the credit report. Many pass the cost to the consumer. More or less, you can expect to pay $100 for a credit report with scores.

Your mortgage loan originator should have access to a score navigator or simulator. That’s a fast way to find out what’s possible in terms of raising your scores if you, for example, pay a bill off or pay it down.

Once you complete the tasks to boost your score, it gets raised by a process called rapid rescoring, and that’s an expensive process. You, as the consumer, are prohibited from paying for this. Your lender must absorb the cost, which might be $40 per bureau per account, plus the cost of a new credit report.

Increasing the score for one bureau for, say, one credit card account will cost roughly $220 ($40 times three plus $100). It’s the most valuable free service you can get in the mortgage application process.

The following tips to raise your FICO scores come from Mindy Leisure, director of credit education at Advantage Credit. (Full disclosure: my firm does business with Advantage Credit.)

—A medical collection can reduce your score by 100 points. Collection agencies may accept 50 cents on the dollar especially for dated (older) accounts. Contact the collection agency on a Friday afternoon to negotiate the balance and ask for a credit report letter of deletion. If the representative doesn’t play ball with you, ask for a supervisor. Never contact collection agencies on a Monday. People tend to be in a better mood on Friday afternoons, right before the weekend. 

And a note on medical debt: Open collections under $500 are not reported to credit agencies. More than $500 debt is reported but are deleted once paid. A new law that would have eliminated medical debt from credit reports is on hold, pending the new White House administration and lawsuits from the Association of Collection Agencies, according to Leisure.

—If the collection account is nearly seven years old, don’t pay it. It will fall off your credit report at seven years. Your credit score can actually get worse if you pay off a collection without a deletion letter because you get a more current reporting date.

—All credit inquiries from the mortgage industry count as just one inquiry from TransUnion and Equifax, if pulled within 45 days. Experian is just 15 days. So, if you apply around, be sure you do it within 15 days of the first application.

As an aside, an inquiry can hurt your score anywhere from zero to 10 points. The cleaner the original credit, the less the score hit. If you do not take out any credit from that inquiry, any reduced scores will dissipate within six months.

—If you have a $10,000 credit limit for credit card X, and your balance is $5,000, Leisure advises to pay the balance down to 10% of the limit or $1,000. That can be worth a 5-20 point credit score boost. Doing this earns you a better score than paying it off. “Fair Isaac is not fair,” said Leisure.

—If you don’t have the funds to pay a credit card down to 10%, go back to the creditor and ask for the credit limit to be increased.

—Don’t close accounts because you will lose the good scoring credit for history. History is worth 15% of your score.

—Don’t open new accounts unless you must.

Lastly, I advise clients not to spend money on a credit repair company. A good mortgage loan originator can solve whatever is possible to solve and the service is free to you.

Freddie Mac rate news

The 30-year fixed rate averaged 6.76%, 5 basis points lower than last week. The 15-year fixed rate averaged 5.92%, 2 basis points lower than last week.

The Mortgage Bankers Association reported a 4,2% mortgage application decrease compared with one week ago.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $806,500 loan, last year’s payment was $249 more than this week’s payment of $5,236.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.625%, a 15-year conventional at 5.375%, a 30-year conventional at 6.25%, a 15-year conventional high balance at 5.875% ($806,501 to $1,209,750 in LA and OC and $806,501 to $1,077,550 in San Diego), a 30-year-high balance conventional at 6.625% and a jumbo 30-year fixed at 6.5%.

Eye-catcher loan program of the week: A 40-year fixed rate mortgage, interest-only for the first 10 years at 6.625% with 1 point cost.

Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or jlazerson@mortgagegrader.com.