Houses for Sale in San Diego - Federal loan limits which were increased by Congress three years ago to help high cost states such as California are set to expire on Saturday, October 1, 2011. The majority of banks have stopped making loans at the higher limits months ago in anticipation that Congress would not vote to extend them any further. And it appears they may be right.
It seems very unlikely that Congress will extend the loan limits given their desire to reduce the government’s exposure in the mortgage market and the cost of failed mortgages to taxpayers.
The loan limit determines the maximum size of a mortgage that the Federal Housing Administration, Fannie Mae and Freddie Mac can buy or guarantee. These so-called nonconforming jumbo loans that are provided by the private mortgage market usually require bigger down payments
and carry a higher interest rate, which ultimately drives up the borrower’s monthly payments.
Loan limits in California’s highest cost areas are expected to be reduced by $151,250. This will not be good news for the already struggling housing market as would be FHA and Fannie Mae buyers are forced to stop looking for houses for sale in San Diego.
For information about houses for sale in San Diego please contact Broker Russ Petrone with Petrone Properties Real Estate Associates at (858) 775-1812 or visit us at www.PetroneProperties.com
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