While the 2022 Conforming loan limits have not been officially announced by the Federal Housing Finance Agency, we at Bluefire Mortgage Group, are ready to start offering conforming loans up to $625,000 starting today!
Why does that matter?
Well, this is a significant boost from the current limit of $548,250 and this increase in loan limits will dramatically increase what borrowers can qualify for throughout the country.
This will specifically benefit many of the lower cost counties as borrowers will be able to apply for Conforming mortgages instead of Jumbo mortgage loans. Jumbo loans are typically harder to qualify for and carry higher interest rates because they’re not backed by Fannie and Freddie and require stringent underwriting criteria.
So, what exactly does this mean for borrowers?
Let’s assume a borrower wanted to purchase a home for $600,000. Before the new loan limit increase came into effect, the borrower would have to put 10% down in order to keep the loan amount under the Conventional loan limit of $548,250.
If they borrowed more than that $548,250, the borrower would have to go with a high balance loan (depending on the county they are located in) or a Jumbo loan, which generally equates to a higher rate and higher fees.
However, with a loan limit increase of $76,750, borrowers would be able to put a 3% down payment (minimum down for a conventional loan) on that same $600,000 property and avoid the need for a Jumbo loan product.
Conventional high value amounts will vary from county to county and we can provide better guidance for this as more information develops. In the meantime, we are now honoring conventional Conforming loans of up to $625,000.
Give us a call at (760) 930-0569 for more information or with any questions you may have regarding these changes.