Wednesday, August 17, 2011
Time Is Running Out For High Balance Loans On Conventional And FHA
Time is winding down for the Home Buyers in the High Cost Counties (Like Los Angeles), whom are expecting to qualify with a Conforming Loan above $625,500. Many have been Pre-Approved with a loan amount to $729,750. On the other hand, there are current homeowners, whom have not taken advantage of the lower rates by a refinance.
As you may or may not know, the higher limits ($729,750) will be reduced to the permanent level of $625,500* (some Counties will belower, review the County limit by clicking here) on October 1st, 2011. That means any refinance or purchase transaction need to be closed by September 30th at the very latest.
Interest Rates have dropped, so Mortgage Applications increased. This means that Lenders are very busy with their current business. Because of the large influx of business, many Lenders are now turning away these types of transactions because they are quoting 90 day escrows for their current business.
If you are in California and fall into this category, then feel free to contact me for some assistance. Anything after September 1st, will be almost impossible to complete on time. If you don’t complete your transaction by then and carry a loan balance above $625,500 (or possibly lower, depending upon your County –again, clickhere to see what your County limits will be), then you will fall under the Jumbo loan programs.
Jumbo Loan Programs will require more down payment (minimum of 20%), higher fico score requirement, higher interest rates and lower ratios for your Debt-to-Income (compared to a Conforming loan program). This will also affect those utilizing FHA loans, as they will be decreasing their limits (like Fannie Mae and Freddie Mac).
Contact Mike Bjork, whom is a Sr. Mortgage Planner with First Cal Mortgage. He can be reached through his website at www.CaliforniaMortgageTips.com.