HELP. I’ve fallen and I can’t get up!

The U.S. just lowered the size of mortgage it will guarantee.  The current conforming loan limit, which determines the maximum size of a mortgage that the Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac can buy or guarantee–expired Friday, Sept. 30. 

Beginning Oct. 1, the conforming loan limit was decreased to $625,500, from the current $729,750 limit, though the majority of counties fell far below the $625,500 maximum.

Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) estimates that more than 30,000 California home buyers statewide will be impacted by the change to the conforming loan limits.

I prepared you for this event for many months.  What does this mean to you?  If you need to sell a home in the $600K range, your pool of qualified buyers is now smaller.  Be sure to put your home on the market in October before the price decreases in the next few months.  If you have a home in the 400’s or 500’s.  It is likely that your value will decrease a bit later as a result of buyers being able to buy larger homes under the new $625,500 conforming loan limit.  I expect that SFR homes under $400,000 will not be as affected.  Buying a condo?  Prices recently fell as a result of most communities losing their FHA approval.  If you don’t have a decent down payment, please call me and I will explain your options and see if I can help.

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