The Federal Government has taken important steps to increase mortgage activity, including increasing loan limits for Fannie Mae, Fredie Mac and the FHA and agreeing to buy $600 billion of mortgage debt from Fannie and Freddie. The latter announcement resulted in mortgage rates on government backed loans dropping by a third of a percentage point. However, self-employed borrowers and nonconforming or “jumbo” loan borrowers (loans in excess of $417,000 to $729,000, depending on the market) are finding it difficult to obtain a bank loan, even with good credit and savings, because lenders are relying heavily on loans gauranteed by Fannie Mae and Freddie Mac and the FHA. The Personal Journal of today’s Wall Street Journal has an informative article on this situation including some tips from mortgage brokers on how borrowers can improve their chances of obtaining mortgage financing.
Current State of the Mortgage Market
In News Clippings, Residential Real Estate on December 2, 2008 at 2:06 pmTime to Renovate?
In Construction Law Developments, Green Construction, Residential Real Estate on November 13, 2008 at 7:02 pmHere is a positive effect of the current economic slowdown: many home improvement contractors have more time to take on new projects and can be expected to be very competitive in pricing new jobs. In addition, with oil prices plummeting in recent weeks, prices for material supplies that depend on oil for fabrication and delivery are expected to drop. So now may be a good time to schedule a new roof project or build a new deck that you have been thinking about for a while. Of course, the financial crisis has made it more difficult (but not impossible) to obtain a new loan such as a home equity line of credit to finance the renovation project. If you are ready to take on a construction project, you still need to do due diligence and I recommend you obtain multiple contractor bids before proceeding. My firm can review your contract before you proceed and make sure your legal rights are adequately protected before construction begins!
