Line of Death - What is so special with $417K? (mortgages, housing)

[Whoa]

I am looking to purchase a home and I've come across what some posters call this amount as The Line of Death! Does anyone know what this means?

Is it relation to home prices or loans? Why is it $417K and not $322K or $754K?

[cohdane]

Guessing. $417k is the cutoff in many areas for a conventional loan. Any higher than $417k and you have to get a Jumbo mortgage. Interest rates on Jumbos are not as low as conventional mortgages.

[Debsi]

Between conventional and jumbo loans.


Jumbo loans have higher interest rates.

[TimtheGuy]

Originally Posted by Debsi

Between conventional and jumbo loans.


Jumbo loans have higher interest rates.

Higher rates and more restrictive qualifying guidelines (i.e. tighter DTI, bigger down payment, tec.)

[chet everett]

The surcharge on Jumbo loans is quite high, with rates still over 6%, while conforming loans are down at about 4.5%.

The real annoyance for me is that the $417K value applies to ALL of the country except for a handful of places with political clout and high housing costs:http://themortgagereports.com/files/conforming-loan-limits-2009.pdf (broken link)

Hugely aggravating!