Mortgage limit compliance
Jhe sharp rise in home prices nationwide has caused a significant increase in the amount you can borrow with a conforming loan, that is, a mortgage that meets the guidelines set by institutions supported by the Fannie government. Mae and Freddie Mac. For 2022, the standard compliance limit for single-family properties is $647,200, an increase of nearly $100,000 from the 2021 cap. are higher, up to $970,800 for single-family homes in places like Alaska, Hawaii, Washington, DC and some counties in California, Maryland, New Jersey, New York and Virginia. .
Conforming loans are the most common type of mortgage and often have lower interest rates than other loans. To borrow more than the conforming limit, you must qualify for a jumbo loan, which typically has a higher rate and stricter underwriting requirements. You may be able to get a conforming loan with a credit score as low as 620, and a score of 740 or higher can get you the best rates. Jumbos may not be available to borrowers with credit scores below 600, and you’ll need a credit score of at least 760 to get the best rates, says site vice president Keith Gumbinger. mortgage research. HSH.com. A conforming loan can have a loan-to-value ratio (the amount borrowed expressed as a percentage of the property’s value) of up to 95%, while the LTV of a jumbo loan generally cannot exceed 80%, says Gumbinger. .
If you have a jumbo loan that is now within the compliance limit, refinancing may help if it lowers your interest rate. Using this online calculatorenter information about your current mortgage and your potential new mortgage to see how much your monthly payment would change and the net savings or cost over the life of the new loan.
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