Fed Rate 3.0% But Is It Time To Refinance?

Federal Reserve has cut the Fed rate down to 3.0% so you would think that mortgage rates are lower but I found some interesting things. Today I ordered a wholesale broker rate sheet from Wells Fargo and found out that mortgage rates on conventional conforming loans are much lower than on non-conforming loans.
As of Jan, 2008 the loan limits on conforming loans are:
Units - Loan Limit
1 - $417,000
2 - $533,850
3 - $645,300
4 - $801,950

Wells Fargo rates on 30 year fixed were 6.125% no points. A 30 year fixed over $417,000 on a single family home was 8.375% 30 year fixed no points. That is over 2% higher!

But there is good news! I found that lenders who use their own money to close loans have much better rates on both conforming and non-conforming loans. Their rates on confirming loans are 5.25%-6.0% and non-confirming rates are 5.75% - 6.75. Anyone looking to refinance or purchase a home should shop around and see who offers the best rates. Many websites offer free loan quotes from up to 5 lenders ( Loan Web ).

Conventional loans are secured by government sponsored entities or GSEs such as Fannie Mae and Freddie Mac.