Home Owners Insurance vs Home Warranty
Hello! On this blog we will talk about the new conforming loan limits.
Why are they significant?
So let's take a step back and explain what the conforming loan limits even represent before we discuss what the new limits are.
Every year the FHFA announces what the loan limits for conforming loans will be for the upcoming year.
These are the maximum amounts that Fannie Mae and Freddie Mac are permitted to lend per county.
This is based on statistics that they compile during the year regarding expected home values for the following year.
The new base loan limit for 2023 will be 715,000, an increase from 647200 last year.
The larger amount of 1,073.000 will now be found in places like Hawaii and Alaska, and this is primarily because of the higher price levels in such places.
Additionally, we will learn about the higher-cost counties later this year. We'll keep you updated and provide a video on what those new higher-cost counties are.
Now, you might be wondering why this even matters.
This is crucial because lenders will choose what loan to offer you based on the amount of your loan; therefore, if you go over this amount, you must apply for a jumbo loan.
Now typically speaking, jumbo loans have a higher demand on your financial status to be able to get them, so they typically require higher credit scores, and also a higher down payment.
The ability to utilize more of your income to qualify (thanks to conforming loans, which allow you to use a larger debt to income ratio) is another wonderful perk of staying below these conforming loan limits.
This is a fantastic change, in my opinion, and it fits right in with what the market has been doing over the past eight months. It will provide individuals a terrific opportunity to buy quality homes without having to put more of a financial strain on them.
These changes are already in operation, and many of our lenders are already accepting loans at the new conforming loan limit.
Also, if you found this information useful and believe that someone else would benefit from it, please share this information with them. We want to thank you for visiting our website and hope that you will come back for more.
And I'd love to hear what you think of these changes, whether you think they're good or bad, so please leave a comment down below.
Thank you, guys; we'll see you on the next one.
Miguel
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