While guidelines for lending have become much tighter, there is money to lend and loans are funding at all price levels. For clarity, there have been some changes in the conforming loan limits:
Effective with the Federal Housing Finance Agency (FHFA) release in November 2008, there are two sets of conforming limits provided for first mortgages: 1) general conforming loan limits, and 2) high balance conforming loan limits. General conforming loan limits remain at $417,000. The new high balance conforming limit (max limits are county specific) is $625,500. You can review Loan to Value (LTV) lending limits and county specific limits here.
Recently there have been reports that the U.S. Treasury will lower mortgage rates for purchases to 4.5% for conforming loan limits. Whether that will happen or not remains to be seen. To get a similar result for jumbo loans, sellers can buy down the rate. This can be more advantageous to sellers than a price reduction, it gives them a competitive advantage and it increases the pool of qualified buyers. You can see an example of this benefit here.
While speculation of the Treasury’s actions continue, we have seen great rates. If buyers can afford the home and can also afford to pay for the things that matter to them going forward, now is the time to buy.
Please contact me with any questions you may have or to discuss a specific client’s financial or mortgage strategy.
Regards,
Andy