Homes Loans that were expensive and difficult to get for homes priced over $417,000, may get more reasonable in one swift stroke of the congressional and white house pen. The economic incentive package includes changing the conforming loan amount up from the $417,000 limit for Fannie Mae to $625,000 or by some estimates up $830,000. This means that right now with the very low interest rates, around the 5.75% (also anticipated to drop next week) monthly payments could decline dramatically.
Loans for amounts more than the conforming loans (for up to $417,000) traditionally cost about 1% higher than the conforming rate. This means a payment reduction of over $400 per month on a $625,000 mortgage. This is anticipated to be a temporary incentive. The details and number are still being worked out.
Help for Home Buyers!
According to the San Diego Tribune article today this could mean savings for both home buyers and sellers. con
We are advising our buyers that are waiting for the market to hit bottom to watch carefully what happens in Washington in the next few days. And let us adjust your home search to specifically what you want to be able to move on, if the market starts to swing upwards. It is also time for home buyers to look to lenders that will work with you now, anticipating you may want to make an offer to purchase a new home in the near future. It also appears for first time home buyers, more money should be available at a better interest rate. (Supply and Demand theory).
Help for Home Sellers!
For the home sellers that we have been working with, we are asking them to be patient and that some good news appears to be on the near horizon. As money becomes more available more buyers will enter the market and your for sale sign may turn into a sold sign.
As things change we will try to keep you up to date and if you have any resources we can use to gather more information please let us know - Things are changing almost hourly it seems and this time it is good news we are getting.
Best regards, The Mills Team at Prudential
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