HOORAH! President Bush recently signed HR 5140 which is the Economic Stimulus Package of 2008!
Besides most tax-paying Americans getting a rebate check there is really exciting news for home owners from the passage of this stimulus bill.
The conforming loan limits have been $417,500 nationwide. What that means is government sponsored entities (GSE's) Fannie Mae and Freddie Mac would buy loans up to that amount. Under the stimulus plan these limits will be raised to 125% of an areas median home price capping out at $729,500.00 again, its all based on the areas median home price. There are an estimated 13 counties in California that will cap out at $729,500.00!
If you have a "jumbo" loan which is a loan over $417,500.00 then normally you are subjected to a higher set of interest rates because of the increased risk. Now, until the end of 2008 (unless it is renewed by our new president) these limits are raised.
The estimated Sacramento/Roseville Area MEDIAN home price is $381,884 which means that new estimated conforming loan limit for our area will be $477,355. This is over a $59,000 increase to the Sacramento regions conforming limit!
What that means is if you have a loan that goes up to $477,355, then you will qualify for conforming rates which are much lower then jumbo rates! (anything over $477,355 until the end of 2008)
Ask your trusted mortgage professional how the stimulus bill could impact your mortgage situation. If you don't have one, feel free to contact me and I will answer any questions you may have.
Also, if you live in California, I can tell you what your areas estimated median home price is to see if its worth while to refinance and save money.
This program is to go into effect March 7, 2008 so get ready, a lower mortgage payment could be right around the corner.