February 19th, 2014 6:16 PM by Dan Marchiando
January 21, 2014 Newsletter message.A lot has been happening in the mortgage industry over the past few years, as a result of the Recession that started in 2007, and I thought it would be useful to you to have an update on a few of the more important issues, over the next few months.
What's happening with loan amounts?
Conforming loans were reconfirmed for most of 2014, at the 2013 limit of $417,000. High-Balance (aka Super-Conforming) loans in Santa Barbara County were reconfirmed for most of 2014 at the 2013 loan limit of $625,500. The High-Balance limits for San Luis Obispo and Ventura Counties are also unchanged for 2014, at $561,200 and $598,000. The Conforming and High-Balance programs are important because they make up the majority of home loans being made since the start of the Recession, and they are also the least-expensive loans for home borrowers.
A federal agency called the Federal Housing Finance Agency (FHFA) -- on an annual basis -- determines the maximum-size loans for these two loan programs. The FHFA is supposed to determine these maximum loan sizes based on a complicated formula that involves statistical home sale prices, however they are not apparently mandated to use the formula. In the summer of 2013, for a variety of reasons, including the fact that home prices are lower than before, the agency was considering lowering the max loan amounts for Conforming and High-Balance loans. Fortunately, because of lobbying from members of Congress and several industry and consumer groups, these maximum loan limits were continued at their 2013 amounts, so as to not limit access to these important and less-expensive mortgage loans.
Jumbo loans will continue, to be any loan bigger than a county's High-Balance loan limit, which would be anything greater than $625,500 for Santa Barbara County.
The Veteran or VA loan maximum, for their 100% financing loans, actually increased for Santa Barbara County, from 2013's $593,750 to 2014's $643,750. With a down payment, VA loans can go as high as $1 Million.
Where are purchase loan interest rates these days?
Conforming (maximum $417,000) 4.375%, APR 4.410%
High-Balance (Super-Conforming) 4.500%, APR 4.525%
Jumbo 4.875%, APR 4.899%
(effective Friday 1/17/2014)
If you have any questions about any of this, give me a call or shoot me an email--I'm happy to help and I'm never too busy for your questions. And as always, I greatly appreciate your referral of friends and family.
Thanks for your interest,Dan Marchiando