WASHINGTON – Sept. 7, 2011 – Time is short for some buyers and owners of more expensive homes to get the best terms on mortgage loans.
Starting Oct. 1, Fannie Mae and Freddie Mac will cut the size of loans they buy from lenders. That will force many future borrowers into more expensive and harder-to-get jumbo loans.
The Freddie and Fannie limits, which are generally $417,000 for single-family homes nationwide, were raised in 2008 in some high-cost housing markets to stimulate the economy. In many areas, the limits rose to $729,750 and next month they’ll fall to $625,500. Limits will drop more sharply in some areas and less in others.
Major lenders, including Bank of America, Wells Fargo and JPMorgan Chase, have stopped taking new applications for affected loans so that those in process close by the deadline.