Congressional leaders from both parties have been lobbying President-Elect Obama to increase the limits of conforming loans – mortgage eligibility to be purchased by Government Sponsored Enterprises (GSEs), like Fannie Mae and Freddie Mac – in high cost areas from $625,000 to $729,750 as part of an economic stimulus package. Qualified borrowers with conforming loans receive the best interest rates, because many in the financial industry believe conforming loans carry less risk.
Last year, as part of the federal government’s economic stimulus package, the conforming loan limit was temporarily increased to $729,750 in high cost areas. Beginning Jan. 1, 2009, the conforming loan limit was lowered to its original level of $625,500 for high cost areas.
In California, the new conforming loan limits for metropolitan areas range from $474,950 in the Sacramento-Arden-Arcade-Roseville metropolitan area, covering El Dorado, Placer, Sacramento, and Yolo counties to $625,500 in the Los Angeles-Long Beach-Santa Ana metropolitan area.
The purchase of homes in expensive areas of the nation like Santa Barbara is facilitated by reasonable interest rates. By increasing the loan limit for "Confirming Loans" to a higher figure it reduces the interest rate on larger amounts and greately facilitates the purchase of homes by buyers.
Source: NY Times
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment