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December 23, 2019
Is refinancing or homeownership on your radar for 2020?
Did you know that there are some pretty freaking exciting home loan changes coming your way in 2020?
As the housing market ebbs and flows, so do requirements and standards for home loans. And I gotta tell you, it’s so important to not only familiarize yourself with these upcoming changes, but to also determine what these changes might mean for you and your home loan journey.
Today as it stands in December 2019, the loan limits for conventional financing are $484,350.. Which is up from $417,000 a few years ago. What we are looking at in 2020, is the limit on dollars borrowed for your home loan to increase to $510,400 for a jumbo loan.
A jumbo loan simply means that even if you are super qualified (like we’re talking a hefty down payment, good credit, assets, debt-to-income ratio… the whole 9 yards), the hoops you have to jump through to attain your home loan will be a bit more difficult. When a bank is agreeing to loan you such a large sum of money, there is more stipulations, more guidelines, and more paperwork. These types of loans are used to finance properties that are too expensive for a conventional conforming loan.
Using conventional financing, your max purchase price (**with proper qualifications and approval**) could like something like,
3% down payment: $526,185
5% down payment: $537,263
Of course there are things to consider when taking on a larger amount of debt when you are buying a home, but with housing prices increasing (especially here in the valley) there are lots of homes that are in that 500k bracket. Properties that would typically have to be financed as a jumbo loan will now be more attainable to first time home buyers.
And then — there’s the 17k increase in FHA financing!
For folks with more restricted incomes, lower credit scores, or higher debt to income ratios — Federal Housing Administration (FHA) Loans can make homeownership a lot more affordable.
In short — these loans are still issued by private lenders, but they are backed by the Federal Housing Administration (FHA).. and yes, this does come with strings attached. You can learn more about FHA loans here!
With this bump, an FHA buyer (**again, with proper qualifications and approval**) with 3.5% down can now anticipate a max budget of $343,792 in 2020.
As home loan limits are set to increase, the market will become more available to people who are putting 3-5% down.
I’ve said it before and I’ll say it again, one of the major mistakes I see people make when shopping their home loan is not taking the time to get fully pre-approved. This is the part where the reputable loan officer you are working with should map out the options for you! Yes, OPTIONS!
Options that include current changes, options that keep you informed, and options that allow you to be a partner in this process!
Do you have questions about these changes? Questions about options? I live for the questions! Let me know in the comments below!
Lizy Hoeffer NMLS ID # 260183. AZ LO-0913409 I am authorized to conduct business in the state of Arizona. All loans subject to underwriting approval. Certain restrictions apply. Call for details. THIS SITE IS NOT AUTHORIZED BY THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES. PHONE NUMBERS DISPLAYED ARE NOT FOR USE BY NEW YORK BORROWERS. NO MORTGAGE SOLICITATION ACTIVITY OR LOAN APPLICATIONS FOR PROPERTIES LOCATED IN THE STATE OF NEW YORK CAN BE ACCEPTED THROUGH THIS SITE. CrossCountry Mortgage, LLC. NMLS1925878, 3100 West Ray Road, Suite 201 Office 212, 218, 219 & 228, Chandler, AZ 85226 (www.nmlsconsumeraccess.org)
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