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The Real Estat industry has been all a twitter lately.  We’ve been very excited by Congress’ Economic Stimulous Package which included a raising of the conforming loan limits to $729,750.

If you buy a home, today, for $520,000 with 20% down payment,  your loan rate is about 5.5%.  Pay $550,000 with 20% down and that rate is more like 6.75%!!.  I won’t bore you with the math, but that is nearly $500/month difference.  The reason?  The rate for loans over (jumbo) $417,000 is considerably lower than those under (conforming).  And what loan do we use in Northwest Glendale?  Right, the jumbo.

So this is good, right?  Well, maybe.  Today I read this article in Inman News.  The short version is  - things will be better for borrowers, but not as good as we thought.   Lenders are likely to create a middle zone, a “jumbo lite” zone, that has pricing higher than today’s conforming, but still lower than true jumbo (jumbo classic?)

The proof will come  once these loans are available - unitl then anything I say is just a guess.  But, given that we are waiting to exhale, perhaps a gentle tickle is all that’s needed!