17 Comment

  • hipchick,
    Conventional and Conforming. The loan amount is exactly the magic number of $417,000. Does that mean someone put down ~$300,000. Or was there a 2nd?

  • And that number isn’t magic anymore. The limits have been raised.

  • These hill people are crazy!

  • Yeah, hipchick got it, I’ll admit I’m a NWer that is scratching my head. I just think that if I was able to afford a $700,000 house I’d buy something in Mt Pleasant that was a lot more spacious and had a bigger yard. This house looked cramped from the photos, but maybe it looks better in person.

  • Yea, new limits in DC are around $625k for a conventional and conforming loan.

    If the person put down ~$300k, that was quite the ill advised financial move to make. Turning down low interest rates that also contain tax-deductible interest? Do not do this ever. At 5.5% (you could probably do better), w/ a 25% income bracket (probably higher for the person who purchased this, but then some portion of interest deductions may be disallowed if their income is mega high), that is like paying 4.125% on the amount borrowed. A 30 year treasury note was at 4.23% yesterday–so you could have made more money by investing that ~300k in the safest and most liquid investment known to man rather than putting in such a large downpayment (and, obviously, you could obtain a much higher return by “risking” it in the market)..

  • “Why is that?” (in regards to combo of radiator and centrail air)–b/c they are home inspectors, and if you have both, you can find problems with both.

  • The conforming limit in the DC area through the end of the year is actually $729,750. The $625k figure is actually the old number that it will revert to if Congress doesn’t raise it again.

  • saf

    Christina – radiators are wonderful heat. Forced air sucks rocks.

  • @ christina – I’ve heard this very same thing myself when I purchased my home – central ac/heat combo. I could be wrong but I think it’s
    mostly the air part due to were the ducts were located. Or possibly the fact that both were using the same system and heat rises but cool air settles. Anyway I could be way off and I too would love to know the answer

  • I think you all are talking about the limits for jumbo conforming loans, which usually have a higher interest rate than if you have a conventional conforming loan of $417,000 or less.

  • @Nate-No second trust. Big down payment. It’s been a while since I’ve seen a second trust on anything. There are a couple small local lenders that will do them, but they are rare.

    @Anon 12:07 and subsequent responses-As Anon 1:15 noted, the upper limit is for jumbo conforming loans (or “extended conforming” or “super conforming”). Loans over $417,000. will typically mean a higher interest rate and possibly a point or points up front. For FHA borrowers, going over $417,000. means two appraisals, which is something you do NOT want to deal with right now. Trust me.

    @Christina-Radiator heat produces more moisture in the air, which may be healthier, and is known to be fairly efficient. The downside is that the temperature is not as easy to modulate. Also what Naomi said.

  • Bought a house in May (congrats to me!), the lender said that his rates were the same up to the $729k max. I borrowed over $417k; no points. YMMV.

  • The wikipedia link I posted above regarding conforming loans is not very informative. I searched and the most useful articles describing the difference are from Feb/March 2008, when the change was anticipated. Here is an SF Gate article that I think does a decent job describing the difference: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/17/BUFIV311L.DTL.

  • @hipchickindc – what sorts of problems are you finding with the two appraisals for FHA jumbos? I just went through the process without a hitch, but I’m curious to know what others are experiencing.

  • Eli, when you have two different appraisers doing their thing, the results can be very subjective. With the HVCC (google it and you can read about the problems that are arising), we are getting appraisers that don’t know specific neighborhoods. For example, I had one recently where one appraiser made an adjustment downward for the lack of a fireplace in the amount of $7500., whereas the other used $3000. Parking spaces are another adjustment that I have seen all kinds of miscellaneous values for. There’s a big difference in the value of a parking spot in, say, Dupont vs. Bloomingdale. An appraiser that is coming from MD or Virginia may not have a clue.

  • @anon 12:25 pm

    Most people dropping that much $$ are selling and moving up. Lenders (and sellers) want to see %20 down, which means you’re dropping $145K before closing costs. Now you’re talking about a loan difference of $583K vs. $417K. That’s the meaningful comparison, plus factoring cash savings rate. If you don’t treat your house like an ATM, you can move existing equity from a sale without draining existing liquid assets. If you can’t, maybe you’re not a good candidate to buy at this time or at this price (nothing wrong with that either).

    As others have said, the $625 limit is generally irrelevant for the borrower. Anything over $417K will cost a premium for a 30 yr fixed rate loan.

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