Buyers across California May already be feeling the effect of pricier mortgages as the current loan limit expiration date of September 30, 2011, fast approaches and lenders prepare for the reduced loan limits!
That is when the maximum FHA,FannieMaeandFreddieMacconforming loan limits are scheduled to drop to $625,500 from $729,750 limit, and the formula for determining an area’s median home price is reduced from the current 125 percent to 115 percent.
Efforts are being made to persuade lawmakers to keep higher limits-enacted in 2008 as part of the economic stimulus package-in place.
Some lenders, including Bank of America, stopped accepting applications for loan amounts that will exceed the October 1 maximum as early as July 1, 2011.
The California Association of Realtors analysis has determined that more than 30,000 California families will face higher down payments, higher mortgage rates and stricter loan qualification requirements if conforming loan limits are reduced.
Mortgages over the conforming limit are considered jumbo loans, and can’t be purchased and securitized byFannieMaeorFreddieMac. Typically, these loans carry higher mortgage interest rates and higher down payments.
Which Home Loan is right for me?
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IMPORTANT: If you or someone you know is interested in buying or selling a home in the Palm Desert Area, try searching properties on the same Desert Area MLS Realtor’s use, or give me a call….or visit my website at Palm Springs Homes and Estates. I will be happy to give you or your referral my “red carpet service.” After the sale, I will send you a $50 Gift Certificate towards dinner in a fabulous Palm Springs Area Restaurant so you can celebrate!
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