2008 Stimulus Plan Aids Buyers of High-Priced Homes

By
Real Estate Agent with RE/MAX Trinity

·      For a high-priced home, 1% can make a big difference. A monthly payment on a jumbo 30 year loan of $729,000 at 7% would be $4,850. Monthly payments on a conforming loan of the same amount at 6% would be $4,371, a difference of $479

·      The change in loan limits, which allows the federal housing agencies Fannie Mae and Freddie Mac to purchase or guarantee the mortgages, is intended to encourage lenders to write more mortgages because they can easily sell them to the agencies.

·      It should also stimulate house buying and mortgage refinancing. As the thinking goes, once people start borrowing money, they will set back in motion the economic machine of brokers, agents and lenders that has been stalled for the past year and has helped stall the overall economy.

·      Of all the various strategies proposed to help the housing market, many think this one has the greatest potential, particularly for luxury housing markets.

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