Extension of Higher Conforming Loan Limits a Boost?
“Buyers of homes in high-priced markets have some reason to cheer: the federal government recently extended through 2010 the maximum dollar amount for ‘conforming loans.’ This will probably mean better options for borrowers who might otherwise have had to take out ‘jumbo’ mortgages…Alan Rosenbaum, the chief executive of the Guardhill Financial Corporation in Manhattan, said…
lucybb – you’re not going to get a mortgage nowadays more than 3.5x your income. If you got in under the wire and are making it work, good for you, but its not available any more.
No Mme Muffet, haven’t sold our house yet…have thought about it but haven’t made any real moves. We’re bogged down caring for very elderly parents/aunt and it doesn’t look like we’ll be leaving NYC anytime soon. We’ll probably find ourselves selling our house when the market reaches BHO’s magical “clearinghouse price”. Such is life! 🙂
Can someone please do the math for me. How much is a condo or co op that was bought at the glorious price or 500-550,000 dollars during the housing toxic asset bubble worth now in U.S. Bananna Republic dollars?
I stand corrected, lucybb. But, 925k/0.75 = $1,233,333. There’s nowhere in Brooklyn you can pay only $1,233,333 for a brownstone and get $1,233,333/(10 x 12) = $10,278/mo in total rent and where your typical owner earns $1,233,333/3 = $411,111/mo in rental and/or job income. That price has to drop proportional to prevailing rents (downward moving target) and median household income (downward moving target). For South Slope, Clinton Hill or Prospect Lefferts Gardens, the areas $1,233,333 can afford, rents cap at about $1,500/mo/floor (and falling), and median homeowner household income tops out at about $250K/yr (very conservative!). That puts fundamental prices there in the range of $720K to $750K, a 40% drop and half off peak. But only a 25% further drop would wipe out your downpayment. Not overleveraged but very risky. Good luck.
***Bid half off peak comps***
BrooklynGreene! You still have not sold your place? What are you waiting for?
Actually you can only get these so-called jumbo mortgages with at least 25%, which we have thanks to previous real estate investement. So not over leveraged. And rich Wall Street bankers wouldn’t qualify since the income limit for a couple is 200k I think. My point is that the extension also benefits people for whom buying real estate in Brownstone Brooklyn would be impossible were it not for the possibility of being a landlord. Also, as a long time renter, I’d rather have a landlord who lives in the building and is therefore more motivated and available to keep the rentals in good working order than some absentee investor type. How is that bad for renters?
Without this extension anything bigger than a two bedroom is out of bounds for people unless they have a huge amount of cash to put down or can afford the higher interest rates. So I don’t just see this as benefiting only rich people.
BHO, hannible, and Gran Pa. I agree.
The federal government should not be subsidizing only the buyers? This is not fair to the renters.
The federal government should not be subsidizing the recklessly leverage with 0% interest rates. This is not fair to the prudent and savers
The federal government should not have bailed out wall street banks. All these bankers who would have been out of a job are now laughing all the way to the bank with fat bonuses paid out of TARP. This is not fair to the average american tax payer.
Today, there was a new york times article that talked about hunger in the US at a 14 year high. While the rest of this country burns, these wall street banks are partying.
(http://www.nytimes.com/2009/11/17/us/17hunger.html?hpw)
I say we throw all the clowns out of the government, starting with Tim Geither and Larry Suummers.
NO MORE WELFARE FOR THE RICH WALL STREET BANKERS!!
How about the government confiscating the homes of these rich bankers who bought these homes with bogus Wall Street profits. If we took everything from Bernie Madoff and put him in jail. Why does this garbage still work in a bank and manage our money?
Lucybb-
What exactly was your point?
Why should the bankrupt Federal government be subsidizing a couple that make 150K a year to buy real estate? I can appreciate the government helping out the homeless or the impoverished, but everyone else should operate in the free market. What am I missing?