More buyers in high-cost areas may be motivated to purchase a home before an Oct. 1 deadline when the government plans to scale back the size of “jumbo” mortgages it guarantees in much of our real estate markets.
By Oct. 1, the maximum loan amount that Fannie Mae and Freddie Mac is set to decrease from $729,750 to $625,500. Buyers should have ratified contracts by August 31 in order to settle by the end of September or sooner if possible. (The change could occur before October 1.).
This might make mortgages more expensive or more difficult to get for buyers in higher cost areas such as ours. For example, after Oct. 1, a borrower who seeks a government-backed mortgage for a $1 million property may have to come up with a $375,000 down payment instead of $270,000.
Once the current jumbo loan limit expires, lenders who want to make loans over $625,500 will have to either hold onto the mortgage themselves or find a private investor to purchase it.
F. Hill Slowinski, JD, REALTOR® in DC, MD, and VA
W.C. & A.N. Miller Realtors, A Long & Foster Company
Exclusive Affiliate of Christie’s Great Estates, President’s Club 2009
Consultant, Luxury Real Estate, Sloans & Kenyon Auctioneers and Appraisers
4701 Sangamore Road, Bethesda, Maryland 20816
Tel: 301-229-4000 Fax: 301-229-4015
Direct: 301-320-8430 · Cell: 301-452-1409
Email: HSlowinski@LNF.com · Web Site: www.HillSlowinski.com