I think I’m a little late to the party on this one, but I’ve heard twice in the last week that the jumbo mortgage limits were increased as part of the recent housing reform bill. My understanding is that the jumbo limit has increased from $417K to a range of $625K-$729K dependent upon where you live. Some higher cost areas have higher limits…imagine that.
The funny thing is, I didn’t get this piece of information from the mainstream media. I heard it from a mortgage broker that I was talking to concerning my impending move to Boston and the resultant changes in my real estate investment strategy. He was the first one. The second was a buddy of mine who just bought a new home.
Increases in the jumbo limit is important because keeping your mortgage below the limit (i.e. it’s conforming) can make you a more attractive borrower to the banks. Being an attractive borrower (with a conforming loan) means that more banks will be willing to:
- give you a loan
- give you better terms
- give you lower interest rates
Important points if you intend to be a buyer and wish the banks to compete for your business.
I’ve heard (again from my two sources above) that the limit increase expires in Dec 08, so use it now or possibly lose it. You might actually HAVE TO ASK for the increased limits. My buddy who just bought his home was unable to make use of the jumbo increase because his loan originator wasn’t willing to honor the increase. Unfortunately for him, he found out about the changes and asked AFTER his loan closed.
I have my fingers crossed that the government will either extend the increase or make it permanent. I won’t be in a position to buy until Spring/Summer 09.
-Jeff
I’m Minding My Own Real Estate, are you minding yours?
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