I received a reminder this morning from a lender friend of mine at SunTrust (www.suntrustmortgage.com/jgray.) In his email he reminded me that the temporary loan limits for conventional mortgages will expire this fall.
The loan limits were increased when financing was tough during the credit crisis for conventional, FHA and VA loans. In our area, the temporary loan limit was increased to $729,750. Any loan above that limit would be considered a “jumbo” loan with subsequent higher interest rates and stricter loan qualification guidelines.
In September 2011 the temporary loan limit increase will expire. At that time the loan limit will go down – typically about $625,500 for our area. With SunTrust you will have to close no later than September 16, 2011 to qualify for the old higher loan limit.
Today you can purchase purchase a home at $900,000 with 20% down and qualify for the lower conventional loan rates. At some point in September your maximum purchase price for a conventional loan with 20% down will be reduced to $780,000. This will affect the cost of financing homes in the $800,000-$900,000 price range. So, if you are looking for a home in that range you may want to try to close before September.