Yes! Most of the publicity has been directed to the checks the citizens will get, but the real estate industry is excited about a different component of the package. The House plan calls for an increase in Fannie Mae and FHA loan limits from $417,000 to $729,750, or 125% of the area’s median home value. That should translate to about $700,000 for FHA in our area and $625,000 for Fannie Mae loans. The FHA down payment guidelines will be unchanged.
Loans above the maximum, Jumbo loans, are considered non-conforming resulting in higher interest rates and more qualifying difficulties – all of this maximized after the lending debacle commenced. Jumbo interest rates are from 1-1.75% higher than conforming loans. When you combine a savings of 1.5% for the change to a conforming loan status, and the wonderful rate drops of last week, a Borrower can now save $812 a month on a $500,000 loan! It will probably be April before the ESP changes will take effect, but knowing they are coming can help you plan your real estate course of action. Whether buying or refinancing, this is big news.
Not directly related to the ESP, but certainly a sign of the times, are the recent interest rate drops. We saw a 30 year fixed rate loan drop from 6%, good, to 5%, great, in one week – last week. If you’ve been on the fence about taking action in this market you really should look at this low cost money. You can try to time the market drop to save a few thousand, or you can capitalize on the loan incentives lenders are offering and save money during the entire course of your property ownership … while you watch the market recover and enjoy the anticipated appreciation.
Our Advice: With the good loan rates now great, and prices at a point that we doubted we’d see again, it is an ideal time to buy. It is wise to watch the market, but don’t get caught trying to time the drop so long that you become part of the bounce when it turns. Real estate is a long term investment. If you are buying for your residence you not only get the opportunity to make an investment … you get to enjoy it daily. Buy what you want now and get on with your life. We are actually seeing a considerable increase in market activity that will affect the inventory as well as Seller’s attitudes and motivation. The time has come … ask your agent to explain why.
Push Play and get your life off Pause. You control your real estate destiny … take the responsibility and time to get a true assessment of today’s market and how it affects you and your specific circumstances. It will take time to really get it, but it is time well invested.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com or www.carsonvalleyremax.com , or email us at carsonvalleyland@hotmail.com 775-781-5472.
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2 comments:
This will be interesting indeed. Wecan just hope that this helps us turn the corner. Something needs to be done, let's hop this is a stepin the right direction
Short term fixes may not cure the entire economy but they will benefit individuals. Now is a wonderful time to buy a home, those thst are fortunate enough to be in that position and take advantage of it are smart. I saw a sign in a real estate office thst said "Smart people are buying eal estate!" I agree
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