The Federal Housing Finance Agency (FHFA) just gave home buyers across the country a big gift heading into 2017. The FHFA recently announced that loan limits for 2017 are increasing. The conforming loan limit has risen from $417,000 to $424,100 for the entire United States. (Conforming loans, which are not to be confused with conventional loans, are mortgage loans that follow guidelines set by Freddie Mac and Fannie Mae.)
While these mortgage loans’ rise may not seem significant, they’re particularly important because loans that exceed $424,100 are considered to be conforming high balance loans, which means higher pricing and higher fees, as they’re greater than the conforming loan limit.
In addition to the increase in loan amounts across the country, the maximum county conforming loan limits will be increased, making it easier to get a bigger mortgage or to buy a house with less than 20% down, for example.. For example, in Montgomery County MD the old maximum county loan limit was $625,500. In 2017, that number will change to $636,150. This represents an additional $10,650 that the buyer will no longer have to bring to the table. That money can be financed instead. Essentially, the loan limit increase allows you to borrow more money and still stay within conforming loan limits. The reason this is important is because when the loan exceeds the maximum county limit, it automatically enters a more restrictive lending landscape. Such requirements for homeowners include lower debt to income ratios, a stellar credit history and a more solid financial picture.
These loan limits will let people to borrow more money without having to put more money down in their transaction. Current homeowners will be able to refinance larger loan sizes and still stay within the conforming loan limits. The change will also help homeowners who were just a hair over $417,000 stay within conforming limits. And it couldn't come at a better time when mortgage rates have marched up in recent weeks, with the 30-year fixed rate mortgage now hovering just over 4.0%.
If you are looking for a new home, then you should certainly give the Lise Howe Group a call at 240-401-5577 or email us at firstname.lastname@example.org. Now is the time to start your search! Sellers are thinking no one is coming to look at their home until spring! Think what a great opportunity you can get if you buy right now!