Low Cost Home Loans?


Washington appears to be in agreement that it is time to dismantle mortgage agencies Fannie Mae and Freddie Mac. Plans call for phasing out the agencies or privatizing them over the next few years.

One of the first changes – a significant drop in conforming loan limits – will go into effect as of September 30, 2011. In California, loan limits will decrease by more than $100,000 in most counties, and areas like Riverside and San Diego will see a difference greater than $140,000. This represents a huge hit for a state where six out of ten loans meet current limits but not the newly reduced ones.* Other states expected to see a marked decline include, Nevada, Arizona, Connecticut, Massachusetts and New Hampshire.

Changes in Effect September 30 – Could Impact Your Plans to Buy a Home.

If you’re currently in the market for a new home, changes to Fannie Mae and Freddie Mac loan limits could either impair your borrowing capabilities or increase your payments—or both. Here’s a brief overview:

• The conforming loan limit is the maximum amount you can borrow without paying the higher rates required by private investors.
• Once conforming loan limits are reduced, the amount you can borrow without penalty will be lower, leaving you three options: 1) pay a higher interest rate for your non-conforming loan, 2) buy a house that costs less, or 3) increase your down payment to bring the loan amount within conforming loan limits.
• According to many analysts, if Fannie Mae and Freddie Mac are dismantled, borrowers can expect a jump in interest rates. Some even suggest that the 30-year mortgage may become so cost-prohibitive that lenders will no longer offer it.**

To take advantage of today’s favorable lending conditions, you must close escrow before September 30, 2011. But first you need the right home. Start your shopping at Pardee Homes. We have floor plans and pricing to fit your family. And be sure to check-out our Move-In Ready Homes.

Another Smart Solution from a Homebuilder you trust.

*U.S. Department of Housing and Urban Development, “Potential Changes to FHA Single-Family Loan Limits beginning October 1, 2011 from Implementation of the Housing and Economic Recovery Act of 2008,” May 26, 2011; efanniemae.com, “Loan Limits Expiration FAQs,” May 17, 2011
**latimes.com, “Are we facing the end of the 30-year fixed-rate mortgage?” May 15, 2011

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Talk to a PHL Mortgage Consultant.

Inland Empire 951-298-9675
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Las Vegas 702-337-2753
Los Angeles/Ventura 661-713-1996