Finances are indeed the big topic these days. A few days (weeks?) ago I wrote in this blog about the President’s big economic stimulus package, part of which is an increase in the loan limits for a mortgage to be considered “conforming” or not. It used to considered a conforming loan if the borrowed amount was under $417,000. With the new rules, the conforming loan limit for the DC metro area will now be $562,000. There was a possibility of it being even higher, but the limits vary according to geography.
However, this revision is not in place yet, and there is no telling when it actually occurs. Nobody knows. Another thing nobody knows if what the interest rates for conforming loans will look like at this new cap. Banks are continuing to tighten up their lending policies, and we might just return to the olden days when people were expected to put down at least 10%, maybe even 20%, for their home.
So keep saving, and remember that in those good ole days there was little talk about foreclosures, and home prices were affordable. Now, I don’t think they’re going to drop to what prices were like 10-20 years ago, don’t get me wrong. I actually think we’re very close to the bottom, and if I had money to invest in real estate I would definitely invest it now. Just me, just my personal opinion.
