Happy 4th of July!

As we (here in the USA) approach the Independence Day holiday, we'd like to wish you and your friends and family a safe 4th of July holiday weekend.  We're taking a break from our traditional posting here for the holiday, and will resume our posts on Monday. 

As we all remember why we celebrate this holiday, don't get so caught up in cookouts and fireworks that you forget what our Independence really means, and all the men and women who are out there fighting for us so we can celebrate our freedom with our families. Our prayers are with the men and women in our Armed Forces as we celebrate this Independence Day holiday.

Be safe if you're traveling, and we will return with our regular posts on Monday.

Jumbo Loans for Larger Home Loans

In some real estate markets, a house in the $400,000 range may be considered a starter home. So the million dollar question is, "Why is it that a home loan in the mid $400's is considered a Jumbo Mortgage Loan?"

While most of us see the term "jumbo" as relative, Fannie Mae and Freddie Mac, two government sponsored mortgage entities, have their own opinions. Each year, a new "conforming loan limit" is published by these organizations.

The conforming loan limit is the maximum loan size eligible for purchase by either Fannie Mae or Freddie Mac, who purchase the underlying securities from mortgage originators. Those funds are then reinvested in new mortgages, and the flow-of-funds cycle continues.

The conforming loan limit, or "Jumbo Loan amount" is set every January. The current conforming loan limit is $417,000.

When a loan amount is higher than the conforming limit, it becomes a Jumbo Loan, or non-conforming loan, with slightly higher interest rates.

Jumbo Loans, compared with historically low mortgage rates, can bring greater flexibility for some home buyers to purchase the house they want and make the payment they want.

With interest rates so low, consumer interest in Jumbo Loans is very high. If you are looking at homes that wouild cause you to secure one of these "jumbo loans", talk to a mortgage expert to see if you qualify to get your jumbo loan with a low or no down payment. There are more options out there than most people understand, so it's important to talk with a professional in the industry before you start your home search.

If you have questions about jumbo loans, or any area pertaining to home loans, mortgages, or home buying, contact us. If we don't have the answers you're looking for, we'll find them for you, guaranteed. Just use the "comment" link below to send us your questions.

Real Estate News - July 2008

Our July 2008  Newsletter is now up…

From the right Nav Menu, Find "PAGES AND NEWSLETTERS" and Select "July 2008 below "Our Monthly Newsletters".  

Buying A House With A Low Credit Score

If your credit problem isn't too serious, you may still be able to get a traditional loan. First, you should correct any errors on your credit report, and challenge any entries you think shouldn't be there. This is your legal right. If you can get it changed, then once those changes are reflected in your credit score, you may be able to apply again and get a loan for that home.

You also can go only to lenders who hold their own loans "in house." This means they don't sell them into the secondary market, which means the loans don't have to meet certain requirements. A bank which holds its own loans can make their own rules (to an extent). Ask around to see if some of your local banks or credit unions keep mortgage loans in their own portfolio. Few do these days, but some still do. It pays to ask.

A more creative way to overcome bad credit is to buy a house with another person. This isn't only for married couples. Any two people can buy a home together, and the lender will look at both credit histories. It might be tricky to buy a house with a friend, but it can be better for both compared to renting. For example, you might have a down payment, and your friend could have good credit. You could agree to sell the home five years later to recover your down payment and each of your respective shares of the equity that is built up from appreciation and the paying down of the loan.

Seller financing is another way to buy when you can't get a loan because of bad credit. Some homes have sold without credit checks and even with nothing down by sellers who financed the purchase. Their motivation is usually to get a higher price and/or to sell a problem property, but this doesn't rule out a good opportunity for you. When sellers don't offer terms, find out if they own their houses free and clear. If so, you could make an offer that involves payments to the owner rather than getting a loan from the bank.

Beating High Grocery Prices

Even though saving a few dollars here and there at the grocery store may not sound like something we should cover on a real estate website, we are trying to bring you multiple ways to save more dollars these days any way we can, because the price of food these days is enough to ruin your appetite, but don't put down your fork just yet. Save some serious green at the grocery by using some of these tips from Money editor Stacy Johnson. This video runs 1:39…

If you know of a quick tip you can share on saving a buck or two… sound off here by using the comment link below. Let everyone else in on your money saving ideas. Your email address will never be published here, so don't worry about that.