San Diego real estate blog – Peter Toner

Just a little over a month and a half left to take advantage of San Diego’s increased loan cap of $697,500 ~ which equals a total purchase price of $719,000 with 3% down on government-sponsored Fannie Mae and Freddie Mac loans! As of December 31^st, 2008 the loan cap will be reduced to $546,250. Any loans using the cap rate of $697,500 will have to close on or before December 31^st, otherwise the loan will not qualify for the higher cap and the borrower may be forced to have a significant increase in the interest rate.

The new cap is fine for those purchasing under that amount, but not so good for those needing a larger loan. Traditionally loans that are greater than the “conforming” loan limit tend to come with higher interest rates and stricter approval requirements. Although San Diego’s conforming loan limit will be decreased, it will remain above the traditional $417,000 cap that many states will be converted back across the nation.

Another buyer assistance program due to expire next year is the $7,500 first time homebuyer tax credit. If you are a first time homebuyer you may qualify to take advantage of this program, allowing up to 10% of the cost of the home or a max of $7,500.

If you are homebuyer sitting on the fence the time may be now to take advantage of combining these two programs before they expire!