Loan limit extensions means more great news

The extension of higher loan limits is here to stay. Well, at least for another year that is. The House and Senate voted on Friday to a one year extension on mortgages backed by FHA, Fannie Mae and Freddie Mac. The limits were set to expire at the end of this year and go back to their previous $271,050 (FHA) and $417,000 (Fannie/Freddie) limits. What does this mean? With a year extension, we can expect to see some more positive signs in the California mortgage market, since 80% of all mortgages in California are backed by FHA, Fannie Mae and Freddie Mac. While home prices in California have declined, the demand for housing has not. The market has been dominated by first time buyers who have faced a shortage of financing opportunities. Sales in move-up and high-end markets have been constrained this year and the loan limit extension will help qualified home buyers in these markets to move forward with their purchases. Not only is this great news for buyers, but it’s also great news for current homeowners looking into refinancing their existing mortgage. Conforming mortgage rates tend to be anywhere from 0.50% – 1.00% lower than jumbo mortgage rates, hence giving more homeowners a chance to save some extra money every month on their monthly payments. Conforming loan limit for San Diego County: – Single Family Residence (SFR) – $697,500 – Duplex – $892,500 – Triplex – $1,079,350 – Four plex – $1,341,350 Loans exceeding these limits will fall into the category of “true jumbo”, subject to higher interest rates and different underwriting guidelines. If you or a family member, friend, neighbor or co-worker is thinking about purchasing in the coming months, there is an opportunity to take advantage of 1) the $8,000 tax credit (extend thru April 2010) and 2) conforming loan limit extension (set to expire end of 2010). Christine Hatchikian, Mortgage Planner 858-863-0260 Christine@GreenMeansGrow.com