Welcome to 2019! The New Year has ushered in noteworthy mortgage financing changes for those planning to sell or buy a home. Buyers and sellers ready to make a move need to recognize that these real estate market revisions may help, or may hinder your quest to meet your real estate objectives. Let’s review 2019’s mortgage financing guideline changes.
Mortgage Loan Limit for 2019
Conventional (FNMA and FHLMC) mortgages and Government loans (FHA, VA, etc.) set forth lending limits for the mortgages they buy or insure on the secondary mortgage market. Baseline limits for mortgages are set in accordance with the Housing and Economic Recovery Act (HERA-2008).
NOTE: Loan limit changes are effective for any closing that occurs after January 1, 2019.
Conventional Mortgages – Fannie Mae & Freddie Mac Loan Limits
Loan limits demarcate whether a mortgage is considered a conforming loan or a jumbo loan. This is an important distinction because conforming loans are the most affordable mortgages on the market.
Remember that mortgage lending limits are contingent upon the region/state in which the real estate. Real property serves as the collateral for mortgage loans. Most real estate in the United States falls within conforming loan limits; however, several parts (Alaska, Guam, Hawaii, and US Virgin Islands) exceed conforming limits. These areas are known as High-Cost Areas. A High-Cost Area is defined as an area where the local median home value exceeds 115% of the baseline limit.
The following table details the conventional loan limits for one, two, three, or four-unit property.
The Department of Housing and Urban Development (HUD) – FHA & VA Loan Limits
The Veteran’s Administration (VA) follows the standard loan limits for conventional mortgages as noted above. However, the Federal Housing Administration’s (FHA) loan limits are a bit more complex.
Similar to conventional loan limits, the Federal Housing Administration’s loan limits vary by location. The FHA loan limit for low-cost counties is $314,827. FHA loan limits reach as high as $726,525 for homes located in the country’s most expensive counties.
Other 2019 Trends That Require Your Focus
Consider the following as 2019 unfolds:
- Interest Rates for 30-year fixed rate mortgages should hover near the 5% mark for the year, barring no unforeseen circumstances.
- Mortgage lending guidelines are becoming more relaxed and lenient. This should make qualifying for a mortgage in 2019 a bit easier than in the past several years.
Please contact us (858) 693-1854 with any questions you may have about buying or selling a home in 2019 – We understand that financial situations, credit scores, and other financially-related things can vary… That is why we employ a flexible, person-centric approach to each individual client, and when you work with us, you’re part of our family!