Tuesday, February 19, 2008

Take Advantage of Higher Loan Limits!

New Law Benefits Homeowners
In response to a stalled economy and the continued housing crisis, the White House and Congress have produced a $168 billion fiscal stimulus plan, which was signed into law by President Bush on February 13, 2008. The plan offers tax rebates to households, incentives for businesses to invest and temporarily increases conforming and FHA home loan limits. Under the new law, conforming home loans — which are loans that Fannie Mae and Freddie Mac will purchase from lenders — will rise from their current level of $417,000 to as high as $729,750 depending on your area. Only a few markets will qualify for the highest loan balance. FHA loans, which recently underwent a reorganization to make them more accessible and more appealing, will also benefit from the increase in designated areas of the country.

Value for New and Refi Loans
For homeshoppers in high-cost urban areas of the country and large market areas on the East and West coasts, these increased loan limits will make homeownership more affordable! Currently, loans over $417,000 are considered jumbo loans, which carry higher interest rates. By raising the conforming loan limit, the new law helps homebuyers avoid the higher rates and get more house for their money. These new limits are in effect only through the end of 2008. The benefits are not limited to new homebuyers — current homeowners can refinance into a conforming loan and potentially lower their interest rate and their monthly payments. As your Presonal Mortgage Consultant For Life, I can help your clients determine if they will save money by refinancing.

These changes will benefit many homeshoppers across the nation, but because of the state of the market, credit scores and other qualification requirements are extremely strict right now. I am happy to discuss creditworthiness, documentation requirements and other criteria to see if the changes to the conforming loans will benefit youe clients.

Regional Loan Limits Will Soon Be Set
The higher loan limits will mostly affect homeshoppers in high-cost areas, although many regions across the country will benefit from slightly higher limits. In the next month, the Department of Housing and Urban Development (HUD) will examine home prices across the country to determine how every region will be affected by the increasing loan limits.

Explore Your Options Now!
You don't need to wait until HUD makes its announcement to start the process of applying for your new conforming loan. Let's discuss your clients unique financial situation, region and real estate financing needs to determine if a conforming loan is the right choice and will offer you a lower rate and lower monthly payments. Call me today to discuss whether this new legislation will benefit your clients.

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Jeffrey Stanton
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