It might become a little cheaper to buy a home. Part of the government’s economic stimulus package announced Thursday (DETAILS HERE) would boost the size of so-called “conforming” mortgage loans (under $417,000) bought by government-sponsored agencies. That move could allow more borrowers to find lower rates when buying a home or when refinancing an existing mortgage.
The current limit is $362,000 for Federal Housing Administration loans and $417,000 for loans sold to Fannie Mae and Freddie Mac. Interest rates are lower for “conforming” loans, and “jumbo” loans exceeding those amounts have become much harder to get since the credit crunch hit last summer.
Meanwhile, the Mortgage Bankers Association reports today on a mini-refinancing boom nationally. Refi applications are up 92% since November, the group said, and up 16.9% last week from the week before. Refi applications made up 66% of all apps last week. And average rates for 30-year loans, conforming of course, dropped to 5.49% from 5.62% a week earlier.