We are now accepting conventional conforming loans up to $750,000! Although they haven’t been officially released by the Federal Housing Finance Agency, we at Bluefire Mortgage Group are honoring these new loan limits effective immediately. (We will give you another update when the official loan limit increase is announced by the Federal Housing Finance Agency.)
Why does this matter?
This is a reasonable increase from the current limit of $726,200 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 – such as Riverside, Sacramento, and San Bernardino – as borrowers will be able to apply for Conforming mortgages instead of Jumbo mortgage loans. Jumbo loans are typically harder to qualify for, require higher down payments, and have stringent underwriting criteria.
What exactly does this mean for borrowers?
Let’s assume a borrower wanted to purchase a home for $800,000 in a county that did not have a high balance loan limit. Before this new loan limit increases, the borrower would have to put at least $73,800 down in order to keep the loan amount under the Conventional loan limit of $726,200. Now, after this change, the borrower would only have to put down $50,000 in order to stay at the conventional limit allowing them to increase their loan amount and keep $23,800 in their own pocket.
If they decided to borrow more than that, the borrower would have to go with either 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 in addition to stricter qualifying requirements.
However, with a loan limit increase of $23,800, borrowers will now be able to put down just 6.625% for the same property and avoid the need for a Jumbo loan product.
Conventional high-balance loan limits will vary from county to county and we can provide better guidance for this as more information develops. In the meantime, we are now accepting conventional Conforming loan amounts of up to $750,000.
Give us a call at (760) 930-0569 for more information or with any questions you may have regarding these changes.