There has been a recent rumor spreading across the nation that has home buyers pinned by the ears. Due to the recent credit crisis, the real estate market was beaten down and has as yet to fully recover away from high interest rates and excessive down payments to compensate for the fact that buyers groups have their hands tied back. However, an upcoming trend is being fed by major bank chains that will buoy the housing market back to sputtering life.
The plan is aimed at reducing the rates for jumbo loans given out to mortgages within higher-cost neighborhoods, so far mostly concentrated in the Northeast, California and Florida, but soon making its way into Texas also. Instead of the left over resources and limitations put forth by the government, large lenders, namely Bank of America, will be investing in jumbo loans at reasonable rates that the country has dearly missed in the dire times of late.
Jumbo loans are defined as large mortgages exceeding the limit of purchase by Fannie Mae, Freddie Mac or the Federal Housing Administration, with a ceiling lending rate of $625,500. According to this new program, that ceiling has now been temporarily lifted by Congress to a maximum of $729,750 and will remain through the end of this year. That means that banks can accept loans with a minimum of Congress’ ceiling rate. What Bank of America intends to establish are jumbo loans starting at $730,000 up to $1.5 million, with fixed 30-year rates starting in the upper 5% range and a minimum down payment of 20%. Bank of America is offering this program through is retail network as well as its Home Loans division, formerly Countrywide. Other banks are also moving to catch the bandwagon, including ING Group.
The incentives are promising, fueling the struggling markets with necessary capital. With the custom concept designs brought forth by Partners In Building, being granted the lowered rates for jumbo loans is an opportunity that should not be avoided. As the best and most well-respected custom home builders in the greater Houston and Austin areas, Partners In Building can look forward to an upcoming increase in interested and excited home buyers.
(Source: Chicago Tribune)