The passage if the stimulus package by both houses opens the door for higher loan limits. Once signed by the President, Fannie Mae and Freddie Mac will be allowed on a temporary basis to purchase mortgages that are greater than the current limit of $417,000 for a single family home.
The new limit will be under $730,000 for high cost areas and less in other areas.
FHA insured mortgages will also increase but on a permanent basis.
The greater benefits will come from FHA insured mortgages because the loans originatad under this program target borrowers that do not meet the conventional guidelines set by Fannie and Freddie.
People who may have taken subprime loans in the past may find it easy to refinance through FHA because the new loan limits can now accommodate their loan amounts. It may also be the case of conventional loan holders who no longer qualify to refinance under the same program due to the tightening or recent guidelines.
A recent survey of major lenders indicates that at least half have increased the requirements to secure a mortgage. Some of the key changes are the credit scores, the minimum equity and the debt load.
Investment properties receive more scrutiny as foreclosure rates are higher in that category. Faced with declining values, investors are more likely to walk away from the property than an owner who makes it his principal residence.
The bottom line is that higher loan limits will help some home owners refinance to lower rates. Fha insured loans will provide the greatest benefits.
Inquire about a mortgage at www.mortgageapp.blogspot.com It's free and it's fast.
No comments:
Post a Comment