Comments on: Jumbo Mortgage Limit Raised: A Refinancing Trap

By: Frugal

Frugal — Sat, 03 May 2008 15:55:43 +0000

Yes, I totally agree that 20% should be the minimum. And I think the system should make the homeowners 100% responsible for any deficiency, so that everyone is responsible for their own decisions. That is the best way to stop speculation, and put everyone on a fair playing ground.

By: Mike D.

Mike D. — Fri, 02 May 2008 15:44:14 +0000

Another consequence is that the high end housing market, even in relatively unscathed areas like Seattle (where I live) has started to freeze over the last month because the April 1st jumbo limit change has had zero effect on jumbo spreads or availability. So essentially, the only way to get a reasonable rate on a $1.5m home is to put a whopping $1.1m down and get a conforming loan. This has dramatically decreased the amount of willing and able buyers (with great credit, even) who would have gladly put down a nice $300k down on that $1.5m home several months ago.

By: lakshmanan

lakshmanan — Fri, 02 May 2008 13:32:47 +0000

Honestly, in my opinion if you are not able to offered 20% down then you don’t deserve home and nobody should lend you. At the same time, I see your point due to over valuation and crooked brokers there are lot of folks who took interest only loan assuming property value will continue to rise.. I am sorry about those folks.. what else can they do.. not a lot of option than trying to pay down monthly mortgage payment..