Buy your BIG HOME.... NOW!!! or you might not be able to in 2009...

If you have been searching for the best time to buy yourself a larger home and deciding 'when is best?'... you might have come to end of that timeframe.  For most buyers in today's market you aren't going to buy a home with 20% down (which on an $750,000 house is $150,000!!)... most people buying today are using a government loan that allows you to buy a home with only 3% down.... it's called an FHA loan.  (On an $750,000 house that would be $22,500... not too bad!) It is a great loan and if you need to learn why look at one of my past blogs called '10 reasons the FHA is a great loan'...

Well... let's get to the point.... WHY is the window for buying a larger home closing for most people?  It's simple... the FHA loan limit used to be $417,000 which for Orange County will barely get you a condo in a decent area.  The loan limit was raised for 2008 to try and spur people on to buying homes in the higher markets.  The limit was raised to $729,750 and the limits were set to run out as of December 31st, 2008... and the new limit would be decided upon later. 

Well they have decided upon the new limit and the new limit will be $625,000 as of January 1st, 2009.  So, if you and your family are looking to buy a larger home and would be getting a loan for the home you should have a 'heart to heart' and decide if that buying a home above $650,000 is what you want to do... because IF IT IS then you don't have much time to get a great deal on the loan!

I spoke with my lender, who has been in the business for the last 18 years and asked him about the loan limits... this is what he said...

"In regard to the FHA limit; It is almost certain that the new FHA loan limit will be $625,000, however, since it's the government that we are talking about there are steps.  #1, the base FHA loan limit for 2008 is still $362,790, but we can go to $729,750 through the rest of the year.  The government wants to see all FHA Jumbo (Gumbo) loans close by December 10 to allow the time to sell on the secondary market for GNMA pools.  As of January 1, the base loan limit will probably go up to $417,000, but can stay at $362,790, with a new Gumbo limit of $625,000.  The rates and prices for both will remain different, like they are today, where the base FHA is less expensive than the Gumbo.  If you have a buyer for something over $625,000, and they want to go FHA, then they better act fast or else they will either pay a much higher price to close at the end of the year or not be able to get a loan bigger than $625,000 after Janaury 1.

In regard to another FHA change on January 1; the minimum down payment will increase next year to 3.5% rather than 3% across the board.  That's been published and will happen for sure.

The bottom line with the government is that, until it is published in the Federal Register, it is not happening.  They can agree to it, but lenders cannot act on it until they say so and have it published. 

One thing for certain, the $729,750 will not be here in 2009."


So if you are interested in GETTING A BIGGER HOUSE call me today ...
Let's see if you NEED TO BE BUYING NOW before this loan passes you by...