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High Balance Loans Returning; $8,000 Tax Credit fo First Time Home-Buyers

Almost all of our lenders are currently at 4.875% for a “one point loan”, but we have a single lender that is again subsidizing the purchase market.

We have some final news on the Stimulus Bill with respect to how it affects real estate. There will be an $8,000 tax credit (that does not need to be paid back) for first time homebuyers. In addition, the “high balance” conforming loan limit for “high cost urban areas” will return to $729,750, but the pricing will not be particularly attractive according to our sources. Now it appears that we will have three tiers of pricing: Tier #1: Loans under $417,000; Tier #2: Loans from $417,000 to $625,500; and Tier #3: $625,500 to $729,750. Even if pricing for Tier #3 is not good relative to loans under $417,000, it will still offer an alternative for 30 Year Fixed Rate financing at relatively low rates from a long-term historical perspective. Prior to the stimulus bill, it was virtually impossible to get a 30 year fixed rate for a loan amount above $625,500.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167