SAN FRANCISCO (CBS 5) – There isn’t much time left for some Bay Area home buyers to qualify for a decent mortgage term. What’s considered a conventional loan today will be a pricey jumbo loan in less than a month.
Beginning October 1st, the government is cutting the size of the loans it will guarantee by about $100,000 from $729,750 to $625,500.
This downsize will effectively make borrowers take out more expensive and more difficultly obtained loans.
With the drop in the limit, it will also cause home buyers and sellers to compromise on the type of property they choose to buy and what they plan on selling.
Considering high median prices in the Bay Area, the higher limit jumbo loans made it more realistic for buyers and sellers, but with the new lower threshold, local realtor Janice Lee said it will only make it harder to buy and sell.
If you are planning on trying to beat the deadline, Lee said it is likely you won’t get it. She said that many banks have already decided to stop accepting applications. If you don’t close a loan by September 30th, Lee said you’ve missed the boat and it is likely few exceptions will be made.
Lee said that it might be possible that Congress could revoke its decision.
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