So, Fannie Mae & Freddie Mac have increased (temporarily) loan limits. This means if you are getting a big loan (up to $t523,750, in Boston) you might be able to get a lower loan rate than you would, previously. (The quasi-government agencies are going to back these loans, making them more appealing, plus lenders can now resell them on the secondary market, so your lender charges less interest.)
Of course, there’s a caveat.
You just might not qualify.
[W]hat will borrowers have to bring to the table? According to the product matrix, the smallest down payment on the fixed-rate loans will be 10 percent — and you’ll need a FICO score of 700 to put down anything less than 20 percent. Fannie is not interested in buying any jumbo lights made to borrowers with FICO scores of less than 660. Full documentation, FICO score, and a maximum debt-to-income ratio of 45 percent are required.
In addition, I believe there are new fees associated with the higher-limit loans. So, actual savings may be less.
The advantage of new, higher loan limits? Well, most people buy homes not on the basis of purchase price, but on their loan payments. So, if they get a better loan rate, their payments will be less … which might mean they are more likely to buy a home. Or, may just buy more home.
How does this affect you, if you’re buying a condominium?
Expect to find about the same types of limits and requirements.
Source: Get your jumbo light mortgages here – By Matt Carter, Inman News