Sunday, April 20, 2008

Tougher To Get, Refinance, Condo Mortgage

"Because of underwriting changes by giant investors Fannie Mae and Freddie Mac, plus new restrictions by private-mortgage insurers, getting a loan on a condo or refinancing one you own could prove tougher than you imagined."

That's the warning from Kenneth Harney, a nationally syndicated columnist specializing in real estate.

The major effect is on those who need private-mortgage insurance. Buyers who put down at least 20% are less likely to be affected by the changes.

For details, see the article in Sunday's Chicago Tribune.


On April 17, Freddie Mac reached an agreement with Wells Fargo, Citibank, Washington Mutual and JPMorgan Chase to purchase mortgages up to $730,000 in some areas. Assuming that Chicago is among those areas and that condos are included (we're checking), here's what this means for you:

Traditionally, homes loans above $417,000 were considered jumbo, and were not backed by government-sponsored programs, including Freddie Mac. This resulted in these types of loans being much harder to get in today’s market, and when they were available, it was generally at a higher interest rate.

The April 17 agreement means those looking to purchase new homes or refinance existing mortgages on the higher end should be able to do so with greater ease.

1 comment:

Naheed Amdani said...

This is great news! I have Sellers trying to sell $600k + properties that are having trouble with buyers getting financing. Hopefully the regulation changes will help more people qualify for loans.