OK, so the economy continues to sputter. Here a good report, there a bad one. The economy seems to be growing, but there aren't enough new jobs being created yet. You can't blame the housing sector, though, as it has been busy boosting our economy for quite a while -- and it is continuing to do so.
A recent Reuters report details one housing industry tactic: raising the maximum limits for mortgages. The upper limit for conventional 30-year loans from many lenders was about $300,000 two years ago. Then, it got hiked to $323,000 last year and nearly $340,000 this year. That's an increase of more than 10% in two years.
If you weren't aware of these limits, you should be. Try to borrow more than the limit and you'll be looking at a "jumbo" loan, which will cost you an extra 1/4 to 1/2 of a percentage point in interest and will likely require a heftier down payment, too. So the increased limits should help keep costs down for many buyers -- welcome news for those struggling in this economy. Reuters notes that, "If the loan limit is increased to, say $330,000, for example, a borrower's monthly costs for a 30-year mortgage would drop to $1,978.52 from $2,085.82."
America's housing agencies, Fannie Mae
These changes will help some people buy more house than they previously could have afforded, while others will be able to refinance their current loan into one at a cheaper rate.
Learn much more about home-buying and mortgages in our Home Center and ask any questions you might have on our Buying or Selling a Home discussion board.
