The Real Estate Agent Blog

Craig Miller – REALTOR
Published on: April 3, 2008

Hey there,

This is a follow-up post to “FHA & GSE Loan Limits Increase“, which was down and dirty, informative 1-paragraph post about the new mortgage limits.

So, what does this mean for you? (Just read on…)

Well, it means different things for different people, whether you own a home and are looking to sell, or in the market to purchase a home, or even if you are experiencing difficulty in paying your current mortgage.

Seller:
The loan limits being increased will only (currently) affect the homeowner who owns a house that is valued between the old loan limit amounts and the (higher) new loan limit amounts. But, every homeowner should, eventually, benefit from the new loans. Once the majority of homeowners start to benefit from the new limits, make sure you keep an eye on housing affordability, for that’s what will swing the market around.

Buyer:
The increase in the loan limits will allow a person in the market to buy a house, within the new limits, with a better mortgage. Basically, it is a buyer’s market, and this is the government throwing help to the people who purchased a home during the l-o-n-g seller’s market the nation had experienced. So, as house prices continue to fall, and loan limits have shot-up, this buyer’s market will end when housing affordability* reaches about 50%. Currently, housing affordability is around 15%. I’m saying, buyers and investors, do NOT wait too long to make your purchase, because the change happens between buyer’s/seller’s markets quickly.

Difficulty in paying mortgage:
It seems that with the number of foreclosures taking place and the new loan limits have made mortgage companies to work with homeowners who are having trouble paying their mortgage. I have heard many people who were in an ARM mortgage, or approved for short-sale status from being behind, or have for some reason couldn’t make their payments, get their mortgage re-evaluated to where their home would not get foreclosed on. I’d suggest you talk to your mortgage company before you start getting behind on your payments. If they won’t work with you, then go to another mortgage company for a re-fi. IF YOU NEED TO CONTACT AN ALTERNATE MORTGAGE COMPANY, IT IS VITAL THAT YOU DO BEFORE YOU GO BEHIND ON YOUR CURRENT LOAN!!!

Thanx,
Craig Miller

*housing affordability – determined by the number of houses a person can obtain a loan for that meet the needs of the individual. (craigism** – If housing affordability were to just stay at 50%, then there wouldn’t be a buyer’s or seller’s market. I wonder if the media would still find some way to put fear into the eyes of every homeowner and buyer in the country?)
**craigism – what I believe, personally, not politically.

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