Loans – Peter Boutell, Lending a Hand
Round Thanksgiving of every yr, Freddie Mac and Fannie Mae and the Division of Housing and City Improvement announce the utmost loan quantities that they are going to settle for from lenders for the subsequent calendar yr. These loan limits are known as ‘conforming’ loan limits and so they usually have the bottom charges and probably the most relaxed underwriting pointers obtainable for fixed-rate mortgages. Processing loans with the brand new loan limits for 2021 may start now however may not shut till after Jan 1.
Refinancing householders and homebuyers profit from these greater loan limits as underwriting pointers for conforming loans are usually extra lenient than for the jumbo loans. Whereas the brand new conforming loan restrict for single-family houses in Santa Cruz County might be $548,250, up from $510,410 in 2020, loan quantities from $548,250 to $822,375 are thought of within the “expanded” class and carry barely greater charges.
loan quantities better than $822,375 are thought of jumbo loans. Freddie Mac and Fannie Mae additionally present financing for properties with as much as 4 models. Whereas FHA loans are just for owner-occupied houses, Freddie and Fannie will finance proprietor occupied, trip or funding properties. Charges for the non-owner occupied houses usually carry charges about one half of 1% greater.
Historically, these loan limits monitor the nation’s median residence costs. When the house costs go up from one yr to the subsequent, the conforming loan restrict goes up and vice versa. Once I began originating loans in 1986, the conforming loan restrict was set at $133,250. By the best way, the common residence price in Santa Cruz County in 1986 was $153,000. In October of this yr, the common residence price was $1,200,704, in response to the Santa Cruz County Affiliation of Realtors’ web site.
These loan limits range from county to county. For instance, in Monterey County, the place median residence costs are lower than Santa Cruz County, loans better than $739,450 are thought of jumbo loans.
New loan limits for FHA loans this yr matched this yr’s loan limits for Freddie Mac and Fannie Mae loans. New loan limits for FHA in 2021 will in all probability match the brand new loan limits that Freddie Mac and Fannie Mae simply introduced this week for subsequent yr. FHA loans provide the low down cost choice of simply 3.5% and settle for present funds from relations for the down cost. FHA loans can be found for any homebuyer or home-owner with out earnings restrictions. FHA doesn’t require debtors to be first-time homebuyers.
Native mortgage advisor Peter Boutell has been scripting this column for the Sentinel since 1995. Ship inquiries to [email protected]