You're faced with the challenge of informing your clients about how the rapidly changing real estate and credit markets are affecting them locally. Here's some help.
I've worked in the mortgage industry for 12 years, and I've funded over 1,000 loans in my career - and I've seen this market hit many highs and survive some tough lows.
In February, the President signed into law the Economic Stimulus Package in an effort to revive our battered economy. I wanted to be sure you knew that the legislation is about more than just rebate checks; it can also have a positive impact on current and future homeowners.
Many of your clients may not be aware of how this bill could create opportunities to save money on their home financing. Here are some of the questions I believe your clients should consider & how your community may be able to take advantage of the temporary rules created by this important legislation:
What impact does the Stimulus Package have on borrowers?
- "The Economic Stimulus Act of 2008 is a $168 billion plan intended to jumpstart the sliding U.S. economy. The new bill is designed to help certain ‘high-cost regions' of the struggling housing market by
1) Temporarily increasing the ‘conforming loan limit' from $417,000 to as high as $729,750 in specified areas; and
2) Temporarily increasing the size of loans the Federal Housing Administration (FHA) can insure from $362,000 to as high as $729,750 in specified areas."
What do these new provisions mean for your community?
- "For those looking to purchase or refinance real estate in a ‘high-cost region,' this is great news. These temporary increases could help consumers avoid the higher interest rates associated with ‘non-conforming' or jumbo, loans - which are currently more than a point higher than rates on conforming loans. This means more consumers will be able to take advantage of great real estate deals and get more home for less money. In fact, many homes that some borrowers could not afford just a few years ago could now be within reach, thanks to this temporary government program.
The Stimulus Package is also very good news for homeowners looking to refinance out of their expensive jumbo loan and into a new ‘conforming loan.' While the legislation limits new mortgage contracts to 2008, it does not exclude the refinancing of any past mortgages. This means that, if borrowers qualify, they can take advantage of the new conforming loan limits no matter how many years have passed since they obtained their mortgage - as long as they get it done before the end of 2008."
How is a high-cost region determined? And does our community qualify as one?
- "A high-cost region is typically determined by the median value of its homes. The median value is the specific price that is halfway between the least expensive and most expensive home sold in an area over a given period of time. Not to be confused with the average home price, the median home price is the price at which half of all buyers bought more expensive homes and half of all buyers bought less expensive homes. If that sounds confusing, don't worry. It is the responsibility of the Department of Housing and Urban Development (HUD) to determine and publish what the median home price is for regions across the country. I can easily access and interpret these figures for our local residents, and help them calculate the new conforming and/or FHA loan limits within minutes."
I hope this helps. I look forward to hearing from you all. My contact information is listed below.
For help or questions contact:
Senior Loan Consultant - NMLS #126036
GMH Mortgage Services, LLC
625 W. Ridge Pike, Building C, Suite 100 | Conshohocken, PA 19428 | Direct: 610-355-8039 | Cell: 610-739-6563