Friday, February 8, 2008

Relief for Jumbo Mortgage Loan holders

The Senate passed the Economic Stimulus plan this week, it just awaits confirmation on amendments by congress and a signature from the President. The biggest winners in this economic rescue plan are middle to upper-income Americans who can refinance their jumbo home loans at cheaper rates. The stimulus package temporarily raises the maximum size of mortgages that Fannie Mae and Freddie Mac can purchase and market as securities from $417,000 to as high as $729,750 in expensive parts of the country like New York City and California. The increased loan amount limits could save borrowers as much as 1% on their mortgage, which would translate to $300-500 per month for the average jumbo borrower.

Caution. This is a sunset clause though, and it will expire an december 31, 2008. Do not wait if you are going to refinance your Jumbo loan or want to purchase a home with a Jumbo loan at the enhanced lower rates.

It makes a similar change for loans backed by the Federal Housing Administration, (FHA) which insures loans to borrowers with weaker credit. The limits on FHA will rise to the same amounts, based on geographic area and the average cost of housing. The increase with FHA is a much bigger benefit, as the increase has no sunset clause at this point, and these loans were capped at just over $362K in the highest cost areas. Combined with FHA secure, this initiative provides a welcome boost to help homeowners refinance out of troublesome ARM loans.

VanDyk Mortgage is a Privately held Mortgage Banker specializing in direct funding of FHA & VA loans, plus Fannie Mae & Freddie Mac Conventional loans. Call us first to work with the experts for your next home loan at 866-900-2342 toll free, or visit us at