Well, maybe you have heard and maybe not and maybe if you have, you are wondering what does this mean? The 2020 loan limit changes have increased buying power for many home buyers or for those that are looking to refinance.
First, this is great news. Second, there is a benefit in this if you are looking to buy a new home or to refinance your existing home loan. In a nutshell, here is what this loan limit increase is all about-
Fannie Mae and Freddie Mac loan limits are the maximum amount of money available for a residential mortgage under certain guidelines. There are different loan thresholds for different types of loans. Conventional conforming loans, FHA loans and VA loans all have different limits and guidelines for qualification. Conventional conforming mortgages adhere to one set of loan limits and FHA and VA another.
In 2020, the loan limit changes on conforming loans went into effect at the beginning of the year. Limits were increased from $484,350 to $510,400. This allows many buyers that are purchasing at higher purchase price amounts to stay out of a jumbo loan which is typically a bit more expensive and requires a larger downpayment with a higher credit score. Although there are still unbelievable jumbo loans out there, this increase from $484,350 will have a positive impact on many people in 2020.
FHA limits have increased as well. These limits are different based on location. To find limits in your area, click here. VA loans will no longer have any loan limits. Still, have questions? Give us a call.
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