If you’re planning to buy a home in 2019, you’ll benefit from the Federal Housing Finance Agency’s third consecutive annual increase to conforming loan limits. Since home prices continue to rise in many areas of the country, these new loan limits are crucial to making home ownership more attainable. Here, we share the details on the loan limits for conforming loans.
The new limit for conforming loans
Last year, the conforming loan limit was set at $453,100 for most counties. Since home prices have risen an average of 6.9% between 2017 and 2018, the Federal Housing Finance Agency has responded by raising the new baseline loan limit to $484,350 for 2019.
These changes will affect the vast majority of the country, as there are very few areas that won’t receive a loan limit increase in 2019. If you’re seeking a home in a high cost of living area, the loan limit for your county may be even higher than the baseline of $484,350. To view the loan limits by county, please visit this website.
New thresholds for jumbo loans
Many cities have median home prices well above the average conforming loan limit, so higher limits are in place for areas with above average income and/or home prices. For example, the new conforming loan limit in Boulder County is set at $626,750 for 2019, making it possible for more buyers to qualify for a conforming loan rather than having to seek a jumbo loan. Although the conforming limit is higher for Boulder County, this amount is still well below the average home price of $725,700 for this area.
If you plan to purchase a home in Boulder County (or a city with a similar cost of living) that’s above the $626,750 conforming loan limit, you may need to apply for a nonconforming, or jumbo, loan. This simply means that your mortgage won’t be backed by Freddie Mac or Fannie Mae, and lenders will often require stronger credit scores, a more substantial down payment, and additional fees. To learn more about jumbo loans and the qualification criterion that lenders typically require, please visit this site.
Buying a home is an exciting experience, and the increase in conforming loan limits can make home ownership more achievable for many individuals.
By Michaela Phillips, Guaranteed Rate Mortgage. Michaela is the Vice President of Mortgage Lending at Guaranteed Rate, Inc. Contact Michaela at 303.579.5517, e-mail firstname.lastname@example.org or visit michaelaphillips.com. NMLS: 312874.