Jumbo home loans start at $417,100 and above. A new bill could be push conforming loan limits up to $729,750 and make jumbo mortgage loans anything above $729,750. This will be a major move to offset the housing price and sales decline. As a result, this will be an increase the mortgage loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA). The critical role that Fannie Mae and Freddie Mac (GSEs) play in providing liquidity to the mortgage market has never been more evident than it is today. The national sub-prime meltdown has had a dramatic impact on both the cost and availability of mortgages in many markets. Since August 2007, the interest rates for jumbo borrowers have been more than 1 percentage point higher than conforming loans, which can cost homeowners up to $400 month in higher interest payments.
Raising the GSEs’ conforming loan limit will provide immediate relief to borrowers and alleviate downward pressure on our already fragile housing markets. According to the National Association of Realtors®, increasing the GSE loan limit will result in more than 300,000 additional home sales and strengthen current home prices by 2 to 3 percent.
I also believe that increasing the FHA loan limits is critical to helping bolster our fragile housing market. Current law restricts FHA loans to levels well below the median home price in many areas of the country and caps loans in high costs states at $363,790. These limits are preventing many homebuyers from using FHA to purchase or refinance their loan. The proposed provision will increase FHA loan limits nationwide by raising the floor to $271,050 and the limit to 125% of local median home prices. These increases will help an additional 138,000 Americans purchase and 200,000 families refinance their homes safely and affordably.
Would you rather pay jumbo mortgage rates or conforming rates? It’s a no-brainer answer if you ask me. If the bill gets passed, and it should, you can expect many homeowners who fit into the jumbo mortgage area to refinance and buyers who were on the sidelines to find better mortgage programs and with lower rates for purchases. Homeowners will also feel some relief as home values start stabilizing with the increased sales activity. In addition, world financial markets could calm down, as well as the employment data. It sounds like a win-win situation for everyone; bargain purchase prices for buyers who were on the fence and refinances with lower mortgage rates for homeowners using conforming loan amounts and stabilizing prices.
By: Mario Olivera
Posts Tagged ‘Federal Housing Administration’
Refinancing With Higher Conforming Loan Limits
May 30th, 2010Refinance FHA Home Loan – Refinancing FHA Loans Info!
January 15th, 2010
Are you looking for ways to save money in this tough economy? One of the first places to look is your mortgage payments if you owned a home. And if your mortgage in an FHA mortgage you may be able to save money with a Refinance FHA Home Loan.
First, an FHA loan is a loan that guarantees your lender that in case you default on your payments, the loan will be taken over by the Federal Housing Administration. In other words, your loan is guaranteed to be repaid and the lender has undertaken less of a risk.
It is not a government loan and no taxpayers’ money goes to fund the loan repayment. It is fully funded by the mortgage insurance premiums paid by the borrowers. It was created by congress in 1934 to provide a stimulus to the housing construction business. In that time it has been able to insure over 34 million home mortgages.
For most people the purchase of a home is the single biggest investment that they will make during their lifetime. Investments are made monthly in the form of mortgage payments and the capital builds in the form of equity.
After a few years there is an appreciable return on the investment and there may be reasons to Refinance FHA Home Loan for things such as college tuition or even a vacation to get away from it all. If you are still in the home as your principal residence you may have the option to Refinance FHA Home Loan.
Refinancing FHA loans have become very popular in the last couple if years because it is easy to do and the interest rates are at decades low. You can get
One of the most popular ways to Refinance FHA Home Loan is through a procedure referred to as cash out refinancing. If you own a home that has appreciated and the principal from your monthly payments has been allowed to accumulate you may own a lot more home than your present mortgage indicates. You would then Refinance FHA Home Loan for the current value and possibly at a lower interest rate. Your old mortgage would be paid off and you would be left with the new one and a cash settlement in your pocket.
If your original home loan is an FHA loan and is in good standing, and you do not want cash back you may be able to qualify for FHA streamlined refinancing. The advantage here is that your monthly payment is reduced so that you have extra cash on a reoccurring basis. Your loan payment time may be extended but there is a chance your interest rates may drop. Check with your loan officer to see if you qualify for streamlined refinancing and if there would be an advantage to you to do this.
Refinancing FHA loans is one of the best options to reduce your mortgage payments. You can get more information by clicking the links below. The ease and the lower interest rates are certainly good reasons to check to see if you can lower your mortgage payments with a Refinance FHA Home Loan!
By: Al Hardy
FHA Refinance Loan Qualifications – What You MUST Know Before Refinancing Any FHA Loan
January 4th, 2010
Before you refinance any mortgage there are certain terms you should consider. The same can be said about the FHA refinance loan. Any mortgage that you currently have on your property can be refinanced into an FHA loan. Refinancing your loan into a Federal Housing Administration loan provides you with a lower monthly payment, the ability to avoid foreclosure or default, or it can help with home repairs. The refinance loan is different than the FHA HOPE. FHA HOPE is a homeowners program that protects individuals from default or foreclosure only.
There Federal Housing Administration makes four types of refinance loans available to you.
• The Cash- Out refinance options allows you to refinance 85 percent of your home’s value. The value is determined by a professional appraisal with the FHA lender.
• A Cash- Out option of 95 percent of the appraised value.
• No cash- out
• Streamline FHA refinancing
There are requirements even with FHA refinance loans that you must adhere to. In the cash out options listed above the borrower is required to own the home for at least a year before applying for the refinance loan. For all four loans the amount you can obtain for refinancing will be determined by the homes appraised value. The calculation for non streamlined loans is a bit more difficult, and not really necessary to discuss other than to say the calculation has to deal with the original mortgage and any second mortgages you might have on the home.
FHA streamline loans can only be obtained if you have an existing loan loan. In this particular loan type you are not given cash, but the refinancing will pay the existing loan off. This option helps you lower your repayment amount in the event that the interest rates have decreased since you were awarded the first FHA loan. In the current economic climate the base rate has significantly decreased, allowing interest rates to decrease as well. For a person who acquired an FHA home loan during the housing boom it could be very lucrative for you to refinance.
The downside to refinancing in the current market is the home values. Many areas are suffering from degraded home values, presenting a situation of negative equity. This may limit your refinancing options. If your home value is still on the positive side under the streamline product, the Federal Housing Administration allows for the closing costs to be a part of the loan if the equity is sufficient.
If you are refinancing to an FHA loan there is no down payment required. This has been somewhat confusing for home owners. Since all FHA loans require a down payment, homeowners automatically assume this means the refinancing products as well. FHA refinance loans work like mainstream remortgages, thus there is no down payment in a refinance situation.
These refinance loans are available to any person who qualifies for an FHA loan. Most refinance products with FHA require that you go through the same qualification process as the regular FHA loan process.
By: J. Stewart