The home financing industry continues its turbulent trajectory
Conforming home loan limits are scheduled to decrease on October 1, 2011 from $729,750 to $625,500. What does that mean for you? Your home affordability will diminish. A lot. With a 20% down payment, the price range for a home buyer using a conforming loan will drop from approximately $910,000 to $780,000. The house you want and can afford today will be out of your reach by fourth quarter 2011. Unless you act now. The Housing Economic and Recovery Act of 2008 (HARA) temporarily increased the conforming loan limits to increase the housing market recovery. In high cost areas, like ours, HARA stipulates that government sponsored entities (GSE) can temporarily make loans up to $729,750. This temporary increase of loan limits allowed families to buy homes in our high cost area with conforming loans. This will not be the case too much longer because the United States Department of the Treasury and the US Department of Housing and Urban Development (HUD) issued a report to Congress in February, recommending and encouraging Congress to let the temporary conforming loan limits expire on October 1, 2011. This isn’t an issue for most parts of the Country, but to us in Fantasy Island, my pet name for our area, it’s a huge issue.
Jumbo Loan programs aren’t there any longer
We just don’t have the loan programs available for Jumbo loans that were available several years ago. Jumbo loan interest rates tend to be higher than rates for conforming loans. The $130,000 loss of buying power is huge to our market so for this reason alone, you should be active in the real estate market.
If you need financing with a loan amount between $625,500 and $729750 to either purchase a one to four unit residental property or refinance an existing loan secured by a one to four unit residential property, you may want to secure your financing prior to September 30, 2011. Jed Thibodeau, with Banker’s Preferred in Burlingame, is our lender of choice and he’s ready to help you.
There aren’t a lot of homes for sale
We are entering the most active time in real estate, the summer market. We don’t have a huge inventory of homes for sale any more and that means we are seeing multiple offers on the best of the best. San Mateo County has never seen a large surplus of housing. In fact, we have a shortage of housing for our communities which is why prices remain high. If you keep sitting on the fence, expecting prices to drop, you not only won’t see that but you won’t be able to buy as much as you can today. Short Sales and Foreclosures are around but not in large numbers. We are here to help you find your new home and the best loan available for you. We can provide you with the latest information on the housing available for you within your pre-approved budget. Let’s get started now! Give us a call.
Here’s what’s currently for sale in Foster City
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