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2018 Loan Limits INCREASED


The News 



The Federal Housing Finance Agency (FHFA) has just announced that the maximum conforming loan limits for mortgages on one-unit properties to be acquired by Fannie Mae and Freddie Mac in 2018 will be $453,100, up from the current level of $424,100. 


The FHFA said that in areas where 115 percent of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be $679,650 for one-unit properties.


According to FHFA's seasonally adjusted, expanded-data Home Price Index, house prices increased by an average of 6.8 percent over the past year, so the baseline maximum conforming loan limit in 2018 was adjusted to increase by the same percentage.


The FHFA also added that the maximum conforming loan limit will be higher in 2018 in all but 71 counties or county equivalents in the United States.



What does this mean for you?



Since 2012, the housing market has had a big rebound in light of the 2008 financial crisis, but no year has been better to be a home owner than this past one. With a nearly 7% rise in the general level of home prices during the past year, this means two things.


1.) People with houses are getting wealthier


2.) Potential buyers will need to borrow more in order to afford the same house they would a year ago.


In order to keep the housing market from stalling due to a lack of access to capital, the FHFA is increasing the mortgage loan limits buyers can qualify for by the same percentage.


You may be wondering, is there really a "limit" on how much you can borrow? 


Yes and no. No in the sense that you can technically attempt qualify for any mortgage loan amount you want, but yes in the fact that once your loan amount gets over the FHFA limit (as stated above), then it gets qualified as what's called a 'Jumbo Loan'.


To oversimplify it for you, Jumbo Loans are much more difficult to qualify for and can potentially have other disadvantages baked in as well.


It's always crucial to work with a trusted mortgage broker that will speak candidly with you about these differences.


To see how much mortgage you can qualify for with Better Home Financial, click this link.


So if you are a potential buyer, then this means that starting in 2018 the amount of home you can afford just went up. If the rise in housing prices had you feeling like you missed your opportunity, you're likely mistaken!


Economic indicators such and inflation levels and jobs are all showing positive signs, all of which increase consumer confidence and bolster the housing market over the long-term. In addition, mortgage rates are still hovering around record lows, although that is beginning to change.


In short, it's still a fantastic time to buy right now, and it all starts with getting pre-approved for a mortgage. (See also: Top 5 Factors that Determine Your Interest Rate)


Click here to get started for FREE.

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Wally Nikowitz, Broker

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