Financing Pricey Homes Likely To Cost More

Washington, DC, July 18, 2011 -- It's going to cost more to finance high end homes in expensive markets starting this fall unless pending legislation is passed.

Current conforming mortgage limits are scheduled to expire Oct. 1, with limits for the most expensive markets falling to $625,500 from $729,750. However, legislation has been introduced to retain the higher limits for two years.

Mortgages over the conforming limit are considered jumbo loans, and can't be purchased and securitized by Fannie Mae or Freddie Mac, so they carry higher rates.

The limits vary by market and low cost areas won't be affected. However, in more expensive areas like Washington, DC, mortgages will be more expensive. The government says there are 250 counties in the country that would be affected.