The ever changing mortgage landscape

For real estate investors or a regular, residential home buyers, we’ve noticed that availability of mortgage financing has changed since the real estate bubble burst.  It also seems that every time we look in the paper, the terms are changing too! We’ve asked our friend and mortgage expert Glenda Winter-Irving to help us stay on top of changes as they come in. Glenda is a VP with DE Capital Mortgage.  Take it away Glenda….

“Planning to finance your property purchase with a loan in the $418,000-$729,750 range; i.e. a Fannie Mae/Freddie Mac High Balance Loan? Did you know that $720,750 is a temporary limit thru September 2011 for high priced areas?

A high balance loan currently has interest rates up to 0.5% less than rates for “Jumbo” loans. And, you also need very little post-closing cash reserves to qualify.

Congress may soon determine that Fannie and Freddie cannot continue to guarantee mortgages up to $729,750 and, come October, reduce maximum conforming jumbo loans to $625,500. Loans above that amount will then become Jumbo loans. Rates on Jumbo loans may be higher and post-closing reserve requirements could likely increase.

Are you “sitting on the fence” waiting for property prices to go down? You may want to consider the potential impact the decrease in the Fannie?Freddie loan limit will have  on your interest rate and the potential amount of cash reserves you will need to obtain a loan.

To be sure you have the opportunity to take advantage of the increase loan limits up to $729,750; you should have your loan application in before August for a  closing before October.”

If you’d like more information, please feel free to call Glenda at (212) 692-8379, or email her at gwinter-irving@decaptialmortgage.com

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