Loan limits are set to go down October 1, 2011!

The temporary loan limt for the temporary conforming loan limits is schedule to go down from $729,750 to $625,500 on October 1, 2011.  The higher limit is called agency jumbo or high balance conforming by most lenders.  The higher limit was increased to try to help stimulate the economy.  Santa Clara County and other high cost areas will definatly be affected by the reduced loan amount limits.

The change would put any loan over $625,500 in the jumbo category, which will require a down payment of 20% or more on any purchase transaction.  

A seller in the sales price range of $782,000 or more will need to find a buyer with 20% or more as a down payment as of October 1st.  Currently, a buyer can purhcase a home for $756,000 with a down payment of 3.5% obtaining a FHA loan. 

The amount of buyers who can come with 20% is very limited in today's economy. 

Now is the time to purchase a home!