Ever since President Bush announced his stimlus package everyone has been trying to figure out how much money they can get from the government and how soon. What has been missed in those headlines is good news for those people trying to buy a bigger home. You see part of the debate in the senate and congress is whether or not the government will raise the threshold on conforming loans. Currently people purchasing a home at 417K or less qualify for Freddie Mac or Fannie Mae (government backed) loan. Conforming loans generally carry the best interest rates for consumers allowing them to have more house for less money. Conforming loans are also easier to get approved. The problem has been that more and more homes are averageing above that 417K price tag or at least they have in Colorado. That forces the homebuyer to apply for a Jumbo loan and pay the piper when it comes to interest. Part of the stimlus package being debated on Capital Hill is whether or not to raise that 417 threshold to the low 600’s, like 625K.
Some Senators and Congressman think it’s a bad idea, some think it’s well over due and still others say maybe we should do it only for a temporary period of time until we can whether the storm. I say make it permanent, make it now and move the threshold to 700K, it’s not like where ever going to see home prices from our parents generation again. If I’ve learned one thing in life…. it’s that every thing keeps getting more and more expensive, not less. Call your Congressman and Senators or send them an email and let them know raising the jumbo threshold is not only a good idea… it’s an overdue idea.