Seattle-area buyers of luxury and waterfront real estate are very aware of the upcoming changes in the government-sponsored jumbo mortgage limits. On October 1st, the current jumbo limit of $729,750 will be reduced to $625,500 in Freddie Mac and Fannie Mae's attempt to scale back some liability.
The issue for buyers is that retail lenders will not be able to resell these larger loans to FHMC and FNMA any longer. They'll either have to portfolio these loans in-house, or find another private source to sell them to on the secondary market. This will very likely result in higher loan costs and rates to the borrowers.
Although this only affects a small portion of the market, it's significant for a buyer of a $1 million property. Their down-payment requirements for a gov-backed loan like this would now go from $270k to $375k, a substantial difference. If they don't have that extra down-payment cash, they'll be forced to find a private lender.
There are a good number of buyers in this price range that pay cash for their homes, but it will be interesting to see if those in the financed-transaction category make a big push this summer. Considering the timeframe and the current favorable interest rates, it might be a wise financial decision.
Current Listings:
Sam DeBord
Realtor® | Managing Broker
SeattleHome.com | Coldwell Banker Danforth
ph: 206-658-3225 | email: sam(at)SeattleHome.com
Member NWMLS, N.A.R., WA Realtors, Seattle-King County Realtors
Realtor® | Managing Broker
SeattleHome.com | Coldwell Banker Danforth
ph: 206-658-3225 | email: sam(at)SeattleHome.com
Member NWMLS, N.A.R., WA Realtors, Seattle-King County Realtors
Source: Individually compiled NWMLS data. The NWMLS did not compile or publish this information.
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