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New Reasons to Buy Now; Conforming Loan Limit Reminders

Brown stone and concrete Bay Area home located in a conforming high balance loan area overlooks the ocean in late afternoonTHE CRAZIEST THING HAPPENED LAST WEEK…

A seller in an extremely hot market agreed to $15,000 of credits and concessions after the inspection reports came back.

We are still seeing a lot of purchase activity and the above is one of the reasons why – sellers are suddenly much more flexible.

In today’s fast-changing market, a bird in the hand is definitely worth two (or even three or four) in the bush.

I have blogged several times about why it is a good idea to buy, but there are some added reasons now:

  1. Flexible Sellers: Sellers who need to sell are suddenly much more flexible, so it seems that there are deals to be had for qualified buyers.
  2. Low Conforming Rates: Conforming and FHA interest rates are at all-time record lows so it is a great time to lock in a super low rate.
  3. Demographics: I blog about the coming “boom” in housing relatively often. This is because the demographics will not change no matter what happens to our economy. The number of household formations will vastly exceed the number of new homes coming on the market, so prices will have to rise at some point because demand will significantly exceed supply.
  4. Inflation: We have not seen inflation for years and will not for several months. But, as Rich Karlgaard (from Forbes) pointed out in this recent column, when the Fed creates $4 trillion of new money out of thin air (like they just did), inflation seems all but inevitable at some point. And one of the best inflation hedges around is residential real estate.

CONFORMING LOAN LIMITS ARE MUCH HIGHER NOW

A real estate agent emailed us yesterday to ask about jumbo financing for his client who was buying in the $900,000+ range. The agent was concerned for no reason, however, as his client was putting down 20% and was thus far below the conforming loan limit.

This is a quick reminder that conforming loan limits are much higher now, making jumbo financing unnecessary for a much larger swath of borrowers than many realize.

Remember also that there two conforming loan limits: (1) a High Balance Limit for “high cost” areas like coastal CA; and (2) a Low Balance Limit for “low cost” areas like Texas.

Conforming High Balance Loan Limit: $765,600

Conforming Low Balance Loan Limit: $510,400

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