THE MORTGAGE COACH Happy New Year! by Barry O'Meara • barryo@stearns.com


SANTA ROSA, CA. ~ An- other New Year’s Eve has come and gone. As the confetti settles and hangovers dissipate, we brace ourselves for the coming year. Our New Year’s resolu- tions may still be fresh in our minds or draſt ed into an ambitious list of goals. It’s 2018 and time to get moving! On the housing front, So-


noma County is working hard to recover from the disastrous fi restorm that came raging through the heart of Santa Rosa displacing thousands in the middle of the night. From the fi rst responders to the public servants and the neigh- bors that pounded on doors, a heartfelt appreciation still rings throughout our community. With signs displaying sup-


port. In a housing market that was already in short supply, losing 5% of the homes does not help.


It has been said it


could easily take up to 5 years to re-build what was lost and the 2 year window the insur- ance companies have is just not going to be enough. On the lending front, there


are new conforming loan lim- its. Fannie Mae announced new higher conforming limits for Sonoma County. For a sin-


gle-family residence, the new High Balance limit is $648,600 up from the old limit of $595,700. A homebuyer can now purchase a home with a loan amount up to $648,600 with just a 5% down payment. Now a purchase price of $682,000 can be bought with just 5% down.


T e national Conforming limit is now $453,100 up from $424,100. In this price range you can buy a home with as little as 3% down payment. So, a household purchasing a pri- mary residence can get into a $467,000 home with just 3% down. T e conforming loan limits are


set by the Government-Spon- sored Enterprise (GSE), Fannie Mae and Freddie Mac. Con- gress established these fi nan- cial giants to enhance the fl ow of credit to the housing sectors of the economy. T is was a way to increase capital markets and secondary market, reduc- ing the risk to investors and increasing fi nancing options to homeowners. T e conforming limit has constantly increased over the years but aſt er the fi - nancial crisis it was held at $417,000 until last year when it was increase to $424,700. As part of the economic recovery


GSE established a temporary category called High Balance for high cost areas. Conforming loans can be un-


derwritten with fewer overlays, and are more streamline than jumbo loans over $648,601 loan limit. Loans over $648,601 are considered Jumbo and there are limited investors and more stringent


guidelines such as


minimum down payment of 10% and maximum debt-to- income (DTI) ratios of 43%. Under conforming guidelines you could get an approval with a DTI of up to 50%. T is will add needed fi nancing to the higher priced homes, helping the move-up buyer to make that move and opening op- portunities for fi rst time home buyers. T is has a rippling ef- fect that cascades through the economy, as one escrow closes and another one opens. T ere are no longer stated in- come loans.


If you can show


the income, manage the pay- ments, and the home fi ts your needs, fi nancing is available. Owning a home is a sound investment. With strict un- derwriting, the fear of another housing bubble is less likely. T e prices we are seeing are sustainable. As tragic as events were in 2017, it is time to make 2018 a memorable and reward- ing year. Whatever your New Year’s resolutions may be, let’s hope you can accomplish and keep as many as you can.


UPBEAT TIMES, INC. • January 2018 • 15


202 West 7th St. Santa Rosa, CA 95401 707-545-7528


“You opinions about me does not change who I am.” ~ Lailah Gifty Akita UPBEAT TIMES, INC. • January 2018 • 15


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