Loan Limit Increase Makes it Easier to Qualify for a Mortgage
It’s no secret that California housing prices are among the highest in the nation, but homebuyers are getting relief with the announcement that the Federal Housing Finance Agency will increase conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2017. The limits will increase to $424,100 for single-unit properties and $636,150 in high-cost areas including California.
What does this mean if you’re looking to buy a home in the Golden State?
Quite simply, it means that despite high prices, homes will be more affordable. Mortgages within the conforming loan limits will typically have lower interest rates and easier qualification standards.
Buyers seeking to purchase a home with a mortgage that exceeds the conforming loan limits would have to get a “non-conforming” or a “jumbo loan.” These mortgages have higher interest rates and more strict qualification guidelines.
California’s median home price is $515,940 and all markets, with the exception of the San Francisco Bay Area, have median prices within the new loan limits.
The best way to know how these changes can help you is to consult with a local REALTOR®. REALTORS® make a point of staying current with all of the latest regulations and financing options so that you can find and finance the home of your dreams.