Conforming Loan Amounts Will Increase...
This is great news for California Homeowners!!!
President Bush will sign the "Economic Stimulus Package" Bill today, after Congress and the Senate have agreed to temporarily increase the Conforming Loan Limit in 2008 as a part of its "Economic Stimulus Package", up to $729,750 in "High Cost Housing Areas!"
As you can imagine, most of California consists of "High Cost Housing" areas!
I say up to $729,750 for a reason. The Conforming Loan Limit will be determined by marking up the area median sales price by 125%.
As home values remain shaky and underwriting guidelines get stricter, the time to refinance out of your "Jumbo", adjustable, or second mortgage with a high interest rate and into a 30 year conforming fixed is NOW!
So, what does this mean for you?
The increase in the Conforming Loan Amounts will allow California homeowners and homebuyers a short window of opportunity through 2008 to get out of or avoid high interest rate "jumbo" loans and second mortgages with a Conforming loan at a great rate!
30-Year Conforming rates are currently in the 5% range with NO PREPAY!
How do the terms on your first and second mortgage look?
The increase in the Conforming Loan Amounts will also allow California homeowners to get out of their continuously increasing adjustable rate mortgages!
What does this mean to the current state of the lending industry?
Banks will now be able to sell the "jumbo loans" loans that are "sitting on their books" for loan amounts over the previous Conforming Loan Amount of $417,000 to Fannie Mae and Freddie Mac, in order to "free up" funds for new loans, reducing the liquidity problems the lending industry has been facing. The Bill signed by President Bush on Wednesday will affect home loans originated between July 1st, 2007 and December 31st, 2008.
When will the changes go into effect?
Although the Bill went into law immediately after President Bush signed it, the following will need to take place, before banks and investors begin to offer the revised Conforming Loan Amounts to consumers:
1.) Fannie Mae, Freddie Mac and FHA must assess their internal impacts to determine the delivery approach they will require of mortgage lenders and investors.
2.) Fannie Mae, Freddie Mac and FHA must communicate their requirements to mortgage lenders and investors.
3.) Banks will work to identify the impacts on their business and implement the changes as needed.
I expect the process to take 2-4 weeks.
In the meantime, I'm telling homeowners to call me or their mortgage broker. That way we can look over your situation to make sure that all of your "ducks are in a row" for when the time comes to take advantage of the opportunity presented by Uncle Sam to help our economy and your wallet.
As always, I offer a free, straightforward, no hassle, and no obligation analysis of your current mortgage situation.
Call me today to see if we can put your finances into a better situation!
Scott Gormley
Broker/Owner
Oak Valley Mortgage
Direct: 530-592-8362
Website: www.CALoan.com
Email: Scott@OakValleyMortgage.com
"You Find the Perfect Home, We'll Find the Perfect Loan!"
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