Jacky Goff
Pinnacle Realty Associates | Real Estate Brokers & Consultants
Residential • Commercial • Investments
Ft Lauderdale, Fl 33301
Direct Line: (954) 839-6358 • Email: jacky.goff@gmail.com
The San Jose Mercury News reports that the stimulus package approved by Congress will increase the FHA mortgage limit in high cost areas for a single-family home to $729,750 from the current $362,790.
In effect, the FHA loan limit and the conventional loan limit – which was raised from $417,000 to $729,750 – will be the same for at least a temporary period and probably for the long term if the President signs the bill.
The idea of the increase is to lower borrowing costs for home buyers in high cost areas such as California and New York.
By raising loan limits the definition of a “jumbo” loan has changed. Where before a $500,000 mortgage was an example of “jumbo” financing — and thus priced between .75 percent to almost 1 percent higher than a “conventional” loan — under the new system that same $500,000 mortgage would itself be an example of “conventional” financing and thus not subject to the higher cost of jumbo financing. Lower loan costs, it is hoped, will bring more buyers into the marketplace, increase demand, stop price declines and reduce the current inventory of unsold homes.
At least that’s the theory. In practice, it may be excruciatingly difficult to get the new super-jumbo loans unless your credit standing is absolutely sterling. The reason: Those who buy mortgage-backed securities may shy away from the new loans with high limits.
Tags:
fha loan limits, fha loans, florida fha, florida fha loan limits, florida fha loans, Ft Lauderdale, ft lauderdale fha loan limits, ft lauderdale loan limits, new fha loan limits, ft lauderdale fha, fort lauderdale fha, ft lauderdale mortgages, ft lauderdale mortgage information, ft lauderdale, fort lauderdale
