On Wednesday I talked about the benefits of re-engineering mortgages. It seems to me that individual borrowers need to experience a period of stability before they’re likely to feel confident enough to trade up to a better home. Read the rest of this entry »

FHA loan limits, temporarily raised this year as part of the stimulus package, will drop in 2009.  According to a HUD news release (and collaborated by an internal memo at a major bank), the maximum limit of $729,750 in high-cost areas will drop to a max of $625,500. And other areas will drop to 115% of the median sales price in the county but no lower than $271,050. Decreasing property values have  lowered the maximum you can borrow in many areas.

HUD has released this list of 2009 FHA loan limits but it is very hard to read. open the file, then use the ”find on this page” function (in Internet Explorer) to locate your area. The loan limit starts on the 11th character of the wide column of numbers and codes. For example, Reno NV (Washoe County) has a 2009 loan limit of $325,450 for 2009. In 2008 it was $403,750. That’s a drop of over $75,000!

So if your home is in the more expensive end of town or if you live in a high-priced area altogether you might want to get your refi done now. And while you have to the end of the year to close your loan, you’ll only have until the tenth of December to lock it if you want to get the higher loan amount.