Financial Fitness

Legislation gets passed every day that you don't know or care about -- it may never impact your life.  But then there are those times when some law gets passed that smacks you right in the face.

Well, if you're in a high-cost county in California, this might be one of those times.

I spoke with a client this week who wanted preapproval to buy a $750,000 home with $75,000 down (10%).  A year ago I would've said, "Awesome!  Let's do it!"  but this week I said, "You must close by September 30. "

Here's the deal: There have been temporary high limits for jumbo conforming loans for years now, and they are being allowed to expire, going back to the limit of $625,500 (from $729,750) and forcing borrowers to qualify for a regular conforming loan.

In plain English, what that means is folks with a loan value bigger than $625,500 are going to have to jump through more hoops and come up with 20% or more down instead of 10% if they don't close by September 30.