As on January 1, 2009 the jumbo-conforming limit for those borrowers in Eastern Massachusetts is expected to fall to as less as $417,000, which is lot less from as high as $729,750 today. Rates are going to differ by counties.

That is really kind of bad news if you are going to require, a $500,000 to purchase or refinance home in a hub area; however, if you are going to borrow money in the current trend you will pay nearly 5.875 percent annual interest for a 30-year fixed-rate jumbo-conforming loan.

However, if you are going to wait until January 1, 2008, you will be paying “jumbo” rates, which at present range anywhere between 0.875 and 2.125 percentage points higher.

Other things are going to be equal, which means you will be paying a minimum of $285 more per month for your $500,000 loan or in simplified terms an additional $102,700 over the 30-year lifetime of the mortgage.

Before 2008, the mortgages were classed in to just two categories which were “conforming” loans, which were of $417,000 or less and “jumbos” which were mortgages that were more than $417,000. Conforming loans account for lesser interest rates since the government-backed mortgage giants like Fannie Mae and Freddie Mac will be able to buy such amount overdue from lenders.

On the other hand, jumbos are going to charge a lot more since Fannie and Freddie, which the Congress set up in a way to benefit moderate income consumers, will not be able to purchase high dollar loans.  However, critics are arguing since long that buying just modest homes in Boston area or in other high-cost locales will require borrowing above $417,000.  Therefore, the Congress made the new jumbo-conforming category in the beginning of this year as fraction of the new economic-stimulus package.

The newer loans are going to characteristically have interest rates which are in between what is applicable for jumbos and conforming loans rate.

Since the Congress have approved Fannie and Freddie to decrease the upper limit for jumbo-conforming loans in 2009 to be a sign of any decrease in home prices, the rate might decrease on January 01, 2009.  If you require jumbo-conforming loan in the 2008 limits, you must think of acting now.