The Loan Lady Blog

I always try to be a positive thinker, a “glass half full” kind of person even though the mortgage market for the past couple of years has been challenging. I have new reasons to be positive about where things are headed, due to a number of new or improved programs that offer help to both buyers and current homeowners.

The High Balance Conforming Loan Limit is being reinstated to $729,750 in May for our high cost Bay Area. The higher loan levels will allow more people to qualify for purchase or refinance loans at rates much better than for non-conforming loans.   Although the rates on these programs have not been published yet, I’m hoping they will be priced just slightly higher than standard conforming loans up to $417,000.

FHA Loans currently go up to the $729,750 limit and continue to be popular with the low down payment requirement of only 3.5% of the purchase price. Other features that make FHA Loans the best solution for many people include credit score qualification as low as 620, and flexibility in allowing a non-occupant co-borrower to help the borrower qualify for the loan.  These are also a great tool for refinancing if you no longer have 20% equity in your home.

Would you believe you can refinance up to 105% of the value of your home? You can with a new program that is part of the stimulus package for loans currently owned by Fannie Mae or Freddie Mac.  The maximum loan limit is $417,000. This program is already helping many homeowners who have lost equity in their property. The qualifications and interest rates are comparable to conventional 80% financing.  Call me and I can check if your loan qualifies for this refinance.

FHA Streamline Refinancing is available for those who currently have FHA loans on their homes. Owners can take advantage of current low FHA rates through a smooth refinance process. No appraisal is required, which is beneficial if your property value has declined.

I remain positive about the mortgage market in California. Property values are showing some stabilization on the low end, with multiple offer situations on bargain properties. I believe the value stability will move up the price range as financing for high-end property becomes more available and the economy turns toward recovery.

In the meantime, everyone I know is cutting expenses and trying to save money wherever they can. Frugality has become chic--people are not embarrassed to say “I can’t afford it right now”. This is a good thing, a reality check to bring us back from our over-spending habits.