Good news Tuesday, November 29th 2005 for everyone who wants to purchase a home in 2006, the federal mortgage officials have announced the biggest increase in 26 years to the “conforming loan.” A staggering raise of $57,350, bringing it upto $417,000. This is the largest increase since the adjustments began, but for Southern California residents it still probably isn’t enough. The average home loan for the region in 2005 is around $512,000 meaning this qualifies for a jumbo loan and an additional 0.25-0.5% premium for the privilege.
The researchers at the California Association of Realtors estimates that an additional 60,000 buyers could benefit next year and an additional 466,000 homeowners would qualify. This difference between a “conforming” and “jumbo” could mean a saving of $25,000-$40,000 over the life of a 30 year loan, by no means small change. In fact, if the additonal money was placed in a savings fund it would make a nice little nest egg for the future.
Still, for high cost areas such as Orange County these new limits do not go far enough!
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