If you’re thinking about buying a home, you should probably start looking right now! Right now in San Diego, there are three types of loans(in regards to loan amounts):
However, Fannie Mae might be getting rid of the temporary loan limits(the jumbo conforming loan) that were originally implemented by the Economic Stimulus Act of 2008. So for those what want to borrow anywhere from $418,000-697,500 right now, you’d be borrow at a rate of about 4.875%. After September 30th, 2011, you might have to pay 5.25%, or more. Based on these rates, let’s look at a few scenarios to put this into perspective:
Example 1* – Purchase Price $522,500; 20% Down; $418,000 Loan Amount
Before October 1st, 2011 – Monthly Payment(Principal, Interest and Property Tax) – $2,756.38
After September 30th, 2011 – Monthly Payment(Principal, Interest and Property Tax) – $2914.24 ($157.86 MORE per month, or $1,894,32 MORE per year, or $56,829.60 MORE over the life of the loan).
Example 2* – Purchase Price $930,000; 25% Down; $697,500 Loan Amount
Before October 1st, 2011 – Monthly Payment – $4660
After September 30th, 2011 – Monthly Payment – $4929.09($269.09 MORE per month, or $3,229.08 MORE per year, or $96,872.40 MORE over the life of the loan).
*Example monthly payments include Principal, Interest and Property Taxes(1.25% per year)
In addition to the higher interest rate, Jumbo loans are typically much harder to get. Lenders have stricter guidelines for these loans and I doubt this will ever change.
If you’re looking to buy, or sell(because you need buyer’s who can get loans), do it now! There’s a shortage of inventory, low interest rates(for now) and a healthy demand. What are you waiting for?
Contact Denny Oh for any of your real estate needs. 858-243-2092 [email protected]