198922 Resource 178438 178984 178982 1204843227875 1204854393064 Controlled New FHA Mortgage Limits Announced

Coconino County's New Limit for FHA Loans is $450,000.00

We can talk but not lock now.  The investors need to aborb the new limit and price the new limit before we can lock loans to this new limit.We have seen a whirlwind of legislative activity these past few weeks! There is much confusion surrounding the recently passed Economic Stimulus Package and higher loan limits. Unfortunately, the new law can be confusing to decipher, and not everyone will benefit. For this reason, we have provided an outline below that clarifies what this new law means for you and how you can benefit from the higher loan limits.<h2 style="MARGIN: auto 0in">Description and Overview:</h2>An economic stimulus package just passed Congress on <date month="2" day="7" year="2008" />February 7, 2008</date /> and was signed into law by the President on <date month="2" day="13" year="2008" />February 13, 2008</date />. This new law is effective immediately and includes a temporary increase in both the FHA and conforming loan limits to as high as $729,750 in high cost areas. This means that the interest rates on many mortgages will go down because these loans are now eligible to be purchased by Fannie Mae and Freddie Mac or insured by the Federal Housing Administration (FHA). Previously, the FHA was only allowed to insure loans with balances lower than $200,160 - $362,790, depending on the county where the property was located. Also, Fannie Mae and Freddie Mac were only allowed to purchase loans with balances at or below $417,000. This resulted in limited options and higher financing costs for those with loan balances above these limits. The new law substantially increases these limits in high cost areas and opens up new options and lower financing costs for many people.<h2 style="MARGIN: auto 0in">How to Determine "High Cost" Areas</h2>There are two things you must know in order to determine if you are in a high cost area:<h3 style="MARGIN: auto 0in">1. Understanding the Formula</h3>If 125% of the local area median home price exceeds $417,000, the temporary loan limit would be that 125% of the median home price with a cap of $729,750. Here are three examples to illustrate this concept:<ul type="disc"><li class="MsoNormal" style="MARGIN: 0in 0in 0pt; mso-list: l0 level1 lfo1; tab-stops: list .5in; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto">If the median home price in your area is $225,000, 125% of that number is $281,250. This is below the current $417k conforming loan limit. Therefore, the conforming loan limit in your area will not change. However, if $281,250 is greater than the FHA limit in your county, your FHA limit will go up to $281,25</li><li class="MsoNormal" style="MARGIN: 0in 0in 0pt; mso-list: l0 level1 lfo1; tab-stops: list .5in; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto">If the median home price in your area is $375,000, 125% of that number is$468,750. This is above the current $417k conforming loan limit. Therefore, the conforming loan limit in your area WILL change and go up to $468,750. This number is also higher than the highest FHA loan limits, so therefore your FHA loan limit will also go up to $468,750. </li><li class="MsoNormal" style="MARGIN: 0in 0in 0pt; mso-list: l0 level1 lfo1; tab-stops: list .5in; mso-margin-top-alt: auto; mso-margin-bottom-alt: auto">If the median home price in your area is $650,000, 125% of that number is $812,500. This number is greater than the maximum cap of $729,250. Therefore, the conforming loan limit in your area will increase to highest allowable amount under this new law which is $729,250. </li></ul><h3 style="MARGIN: auto 0in">2. Determining the Median Home Price in Your Area</h3>As required by law, on <date month="3" day="6" year="2008" />March 6, 2008</date />, the Secretary of Housing and Urban Development (HUD) published the median house prices and new loan limits for the various areas across the country. Contact me today and I'll research your info and let you know exactly what the median home price and loan limits are in your area and how you can benefit from this information.<h2 style="MARGIN: auto 0in">What do all the dates mean?</h2>There is some confusion because the bill has a provision that says the higher limits are only effective for loans originated between <date month="7" day="1" year="2007" />July 1, 2007</date /> and <date month="12" day="31" year="2008" />December 31, 2008</date />. In short, the reason it is effective beginning <date month="7" day="1" year="2007" />July 1, 2007</date />, is because the credit crisis started to unfold in July and August of 2007. Mortgage market conditions rapidly deteriorated almost overnight. Many secondary market investors suddenly refused to purchase loans that couldn't be sold to Fannie Mae and Freddie Mac. (For more info on how this process works, please see the article entitled Saga of the US Mortgage Industry, which I'll be happy to send if you call or e-mail me.)Unfortunately, many mortgage banks had already funded these loans in their own portfolio or through their warehouse lines of credit. Their intention was obviously to sell these loans on the secondary market after the loans were funded. However, the credit crisis prevented them from doing so, and they were stuck holding these loans in their portfolio. The <date month="7" day="1" year="2007" />July 1, 2007</date /> date in the bill is designed to allow these lenders to unload these mortgages and sell them on the secondary market to Fannie Mae and Freddie Mac.However, the <date month="7" day="1" year="2007" />July 1, 2007</date /> date has no bearing whatsoever on new refinance transactions! In other words, it doesn't matter when the loan you are refinancing was originated. The old loan could have been originated in 2005, 2006 or anytime before or after <date month="7" day="1" year="2007" />July 1, 2007</date /> and it would have no effect whatsoever on your current purchase or refinance transaction. If you are financing a new loan today, whether it is a purchase or refinance transaction, that loan is subject to the new limits set forth in the bill.The other date of <date month="12" day="31" year="2008" />December 31, 2008</date /> means that the old limits will go back into effect after this year. In other words, now is the perfect time to buy a new home or refinance your mortgage because after this year, your costs will be higher and your options more limited again.When does this all go into effect?Immediately! However, Fannie Mae, Freddie Mac and various lenders have different policies as to how these loans are priced and underwritten. That is why it is imperative that you work with a Certified Mortgage Planning Specialist who is committed, qualified and equipped to give you timely information and expert guidance every step of the way.Contact me today for a complimentary consultation. I can look up the new loan limits in your area and see whether you can save money in any way. Also, please pass along this update to anyone you know who may be able to benefit, and I'd also be happy to look up the new loan limits in their area and discuss with them whether they could save money. Elizabeth Fontanini, CMPS®Wallick & Volk <street /><a href="mailto:liz.fontanini@wvmb.com">liz.fontanini@wvmb.com</a> <a></a><address>320 North Leroux Street, Suite A <place /><city />Flagstaff</city />, <state />AZ</state /></place /> 86001 928-600-9360 direct 928-556-9519 fax </address><shape id="_x0000_i1026" style="WIDTH: 120pt; HEIGHT: 99pt" type="#_x0000_t75" alt="Cmps_logo_symbol" /><imagedata src="file:///C:\DOCUME~1\EFONTA~1\LOCALS~1\Temp\msohtml1\01\clip_image005.jpg" o:href="http://www.cmpsinstitute.org/images/cmps_logo_symbol.jpg?1182965507" /></imagedata /></shape />  10 application/xml false conforming loans FHA loan limits home loan rates home loans jumbo home loan rates Jumbo loan rates mortgage rates Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322; .NET CLR 2.0.50727; .NET CLR 3.0.04506.30; .NET CLR 3.0.04506.648) 127.0.0.1 127.0.0.1 aheitland 24.120.81.148 false true false false true 178975 false false true false false false true 178438 blog blogsite/BestFlagstaffHomes/web