There are many factors that have driven up the rates of jumbo sized loans, and stated income higher. While conventional Fannie Mae backed and FHA backed home loan rates have enjoyed a recent rate reduction.

You may have recently read about the -.0.75% decrease in Fed Funds rate . You may have thought this is a great time to refinance. In many cases, rates have been steadily dropping over the past year. Home owner’s seeking to refinance their homes has been very happy at rate reduction over the past few months. Many homeowners under $417,000 loan amounts seeking to convert ARM loans into fixed are will be the only winners in this mortgage mayhem.

Loan amounts under Fannie Mae Limit $417,000 and other amounts in US Territories have been getting a great deal of low rates. It is even better for borrower’s that provide income, and asset information in conjunction with their loan applications. Remember you don’t have to have platinum credit to qualify if you can provide your income and tax documentation.

The losers in the current home loan credit crisis will be too groups including Jumbo loan sizes over $417,000, “stated documentation” and “subprime” borrowers with weak credit scores and credit histories. Many small business owners generally have hard to prove incomes due to write offs on taxes. They will be forced to take stated income documentation loans which generally have more restrictive guidelines and slightly higher interest rates (.25%-.50%) in exchange for not having to using their tax returns to prove income.

This segment of borrowers may not have had issues obtaining home loans in the past. Self employed “stated income” borrowers will have to focus on keeping their credit scores high and keeping adequate cash reserves to qualify for new home loans in order to obtain the best or close to published rates. Subprime or weak credit score borrowers will need to watch their finances and make an effort to clear up their credit. Free FICO® Credit Score Estimator

I suggest contacting at least 2 trusted loan officer’s and avoid websites that promise multiple quotes and will pulverize you with phone calls and E-mails from the lenders that “share” your information. The year of the mortgage broker or loan officer is coming back. The Broker or loan officer will work on your behalf to arrange a home loan for you. Think of them as your financial planner for your mortgage or home loans. Be smart & shop for a second opinion.