Here’s the news: jumbo mortgages are about to get a whole lot more jumbo!
Bloomberg reported that up until Nov. 23, the conforming loan limit on jumbo mortgages was $417,000; but the Federal Housing Finance Agency announced that it will raise the limit to $424,100 beginning in 2017. And in some areas (like NYC or San Francisco, where homes are substantially more expensive than elsewhere), Fannie Mae and Freddie Mac will raise the limit from $625,500 to $636,150.
This change in the limit will help some homebuyers purchase a house, because with the rising cost of property, being able to obtain a larger loan can make the difference between buying or not buying. And conforming mortgage loans help because they generally have lower interest rates.
“When you raise the limits, it’s about giving young, successful people the chance to get in the game,” Phil Ganz, a Boston-based loan officer, told Bloomberg.
When legislators created the law that established the original limit, they made it so the limits could not be raised until home prices returned to their levels in the third quarter of 2007, according to the Wall Street Journal.
“Today’s conforming loan limit increase is a much-needed recognition of rising home prices in high-cost markets, and a help to first-time and lower-income borrowers looking to utilize an FHA mortgage,” says National Association of Realtors® president William E. Brown. “Credit remains tight, but this decision will help more qualified buyers address the hurdles and high costs standing between them and the dream of homeownership.”
Home prices are now 1.7 percent higher than during that time period in 2007, so the limit could now be raised. And while, again according to Bloomberg, some Republicans could be concerned about government increasing its role in the housing market, it’s clear that potential homeowners will be pleased with the change.
At Avrus Financial and Mortgage, we’ve been helping people find just the right jumbo mortgages for decades, and we can help you find the one that’s best suited for your specific financial situation.
Why not ask us how… today?