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It is good to see that finally they came to their senses and raised the jumbo from $417K to much higher. It was unfair to charge a 1% or more for a jumbo which was only $20 or $30K more than the conventional.
To keep this thread in Raleigh and not moved, do you guys think this will boost the price of raleigh houses to little higher. In other words should I be buying now or wait for another 6 months to see what the #@$@ is happening?
I don't see why it would raise prices. What would be the theory for it raising prices? Just more people being able to buy? I would be a lot less people will be able to qualify for that amount of mortgage right now.
Well, Yes and No. I was going to put that as my drop dead limit (plus the cash I have in hand) as my total limit for the new house. I was not willing to take on that 1% (which is quiet a bit over 30 years) for the jumbo. Now that they revised it I am going to probablly up my search range by a little bit. I was wondering if the sellers would think the same way and up it by a percentage.
I think there may be a few people in your situation but I'd have to think that most people able to afford the jumbo want it regardless of the point hit, or don't need it because they'll put down the extra cash to get the amount financed below the jumbo cutoff.
I am willing to bet that many who really have to worry about the jumbo hit could really not "afford" the loan by good lending standards, so while the ceiling is hire, the standards are tighter than before. Many people who might have qualified for a jumbo a year ago, may no longer be able to get it.
Have you checked the rates for the new conforming jumbos? My understanding was that they'd have a premium of .5% - 1% over non-jumbo conforming loans, in addition to the fairly strict underwriting requirements (20% down, <45% DTI, etc).
And as long as prices are still going down in this area, I don't see any rush to buy.
Last edited by KCfromNC; 03-19-2008 at 07:10 AM..
Reason: Changed LTV to DTI - not enough coffee this early :>
Agree with Yoda. Everything I read says that Raleigh is still at $417k. Anyone see / hear anything different?
Hmm...In rechecking the statements the value limit will be set at 125% of the area median price (not to exceed $729,750). Raleigh area median price is only $253,900 so this is not applicableto Raleigh area (I made an assumption it is based on a locality median sale price - for example Cary median is way higher, but apparently it is based on Metro median price).
But as far as the limitatons go (in high median areas)
- 30 yr fixed, 15 yr fixed, 5 year ARM, and 5 year IO ARM only
- 1st lien mortgages ONLY; no cash out refinances
- Can refinance a first loan, but cannot refinance a first and second into the new loan; if there is a second loan it must re-subordinate
- Maximum Loan to Value ratio (LTV) is 90% on fixed mortgage
- Maximum LTV is 80% on an adjustable
- Maximum LTV is 60% on an investment property
- Private mortgage insurance must be bought for all loans with LTV >80%
Am I drawing the correct conclusion from the previous posts that we are still set at 417,000 for the conforming loans in Raleigh?
I am running the numbers trying to determine whether to buy-down our mortgage. If I am having to buy down to 417k I am not certain that the "opportunity" cost of tying up that amount of money is still a win for us. The rates are so attractive, though...
Also, can any of you recommend a good mortgage broker??
However, with the tightening of loan requirements (requiring larger downpayment/lower max LTV, higher FICO scores) there are fewer buyers competing for more homes. I had heard that we are sitting at over 8 months inventory in Wake County, so it's considered a buyer's market. Even if prices were to creep upwards because of the lower interest rate on loans > 417k (which I believe is still the limit for jumbo loans in the Triangle), I doubt the effect would be that immediate. A flood of homes have hit the market for the spring selling season and there's still a lot of uncertainty felt by buyers.
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So the cap is unchanged in Raleigh?
