WASHINGTON -- Looking for a more expensive house? Better get moving. An upcoming deadline will mean higher prices.
Fannie Mae and Freddie Mac buy most mortgages, but they won't buy home loans above certain dollar amounts. It's known as the conforming loan limit and those limits will be reduced Sept. 30.
Right now, the upper limit for a conventional loan is $729,750, meaning Fannie or Freddie can't back a loan above that amount. As of Sept. 30, the amount will be reduced to $625,500.
Congress voted to increase the loan limit in 2008 in response to the housing crisis to spur the sales of more expensive homes.
So why does the change matter? It's all about the interest rates.
Steve Cohen of First Place Bank says jumbo loans -- above the conforming loan limit -- carry higher interest rates compared to conventional loans since private investors handle them.
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DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
1 comment:
For almost a decade prior to 2008 the conforming limit was $425k. This decrease in conforming loans are a step in the right directions. With his economy and tigighted credit approvals who has $125k(20%) to put down?
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