Q & A with Dottie Herman

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Q1 - I have heard that the loan amount is going from 729,750 to 625k? what does that mean? And what does it refer to?

A - Starting October 1, 2011, temporary conforming and FHA insurable loan limits will be lowered nationwide.  These "Temporary loan limits" were enacted as part of the government's 2008 economic stimulus package. At the time, the financial sector was entering its crisis, and private mortgage lending had all but disappeared. Financing was scarce for both homeowners and home buyers for whom loan sizes exceeded Fannie Mae and Freddie Mac's national $417,000 limit -- even for those with excellent credit and income.  In high value areas such as the New York tri-state area, the maximums will be lowered from $729,750 to $625,500. The "new maximum loan limit" for both Conventional and FHA loans effective 10/1/11 is $625,500.  Loans at the current maximum limit of $729,750 must close by 9/30/11.After 10/1/2011 any loan over the $625,500 limit will be considered a 'jumbo' loan, have jumbo loan rates, and may be subject to higher down-payment requirements.  Potentially, the down-payment required may be 20% of the purchase price. This potentially impacts home buyers who don't have a large down payment saved up.  If you live in or are buying in a high cost area, mortgage rates may be low, but the amount of loan for which you qualify may be much less than you expect.  You may find yourself ineligible to use a low down payment FHA loan to purchase your home, thus requiring you to have a larger down payment.

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Q2 - We can't afford our home anymore.  And we are upside down in the value.
We haven't lost our jobs but still have hardship in that we can't afford it anymore due to our high debt ratio.  What if we have been up to date with our payments? Do we have to be behind to get a short sale approved because we are trying to pay them as long as we can to keep our credit up and we don't want to just "not pay", but we really need to get our home off our backs and start all over.  Are we a candidate for a short sale?

A - You don't have to be behind on your mortgage to qualify for a short sale. Unfortunately, it seems that lately the ones that are behind on their mortgage get more attention. I would never recommend to anyone to stop paying their mortgage just to get the bank's attention. Your desire to have a short sale is because you don't want to become a victim of foreclosure. I  recommend that you contact your lender to see if they are willing to work with you.

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Q3 - I am selling my home and the house next door to me is a mess. Their front yard is disgusting and will definitely hinder the sale of my property. Is there anything I can do? Everyone who comes to see my property makes a comment about the status of their home.

A - Maintaining a good relationship with your neighbor is important and if you haven't already done so, you may want to reach out and share your problem with them.  They may be unaware that their home's appearance is having an impact on you.  If you are in a position to do so, you may wish to offer your assistance in helping them to get their front yard cleaned up. The last resort would be to check with the Township to see if there are any violations.

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Q4 - Are there any pros or cons to having a dual agent? How can I be sure the agent is going to best represent my interests?

A - An important part of the process of hiring an agent to market your property is to achieve a comfort level and trust.  Checking their references of sellers and buyers they have  represented is helpful. If you find that the agent you chose is not what they represented themselves to be, speak to their Manager and have them replaced.

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If you have a real estate question for Dottie, please send it to; Reporters@WorldPropertyChannel.com

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