Jan 08
25
Coforming Loan Limits and Stimulus Package
Are conforming loan limits going up to $729,750.00? Kinda yes, and kinda no!
Yesterday, the President and Congress worked-out an economic stimulus deal. But it’s not law yet.
The plan would up the conforming loan limits for the remainder of 2008. Currently, the limit on conforming loan amounts is $417K.
What’s the big deal? If you had a JUMBO, at a $500K loan amount, and could get the rate down 1%, as a CONFORMING loan, you could save $330.00 a month. Now, I have never claimed to be a rocket scientist, but I think a lot could be done with $330 a month don’t you? How bout invested at 10% for 30 years? Any guesses? Try a cool $745,961.02!!! Crazy huh!
That concept is called TMV (Time Value of Money) meaning the longer money is working for you in a compound interest environment, the more it makes exponentially. Here is an example, if you just waited on year to start saving that $330 bucks you would lose $74,461.42 ($330 a month @ 10% for 30 years $745,961.02 MINUS $330 a month @10% for 29 years $671,499.60)
Now, I know this isn’t signed into law yet, however regardless of what rates are doing, it’s ALWAYS a good idea to sit down with a qualified mortgage planner and determine if your current mortgage/debt strategy is line with ALL your financial goals. Read my earlier post on annual mortgage reviews.
Until next time, all the best!
Michael
P.S. I just had an idea, send me an email with the subject “mortgage review” and I will get you a form to complete and start your mortgage check-up. If we end needing to complete a new mortgage strategy, I will pay for the appraisal. How’s that for being committed to helping you with your goals!
