Your mortgage: increase in loan limits 2021

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The rise in home values ​​has mainly benefited homeowners and sellers in 2020. In 2021-2022, buyers are also taking a break with increasing compliant loan limits. Between 2019 and 2020, home values ​​increased by an average of 7.42%, according to the FHFA House Pricing Index (HPI). This means that the compliant loan limit will also increase by 7.42% from 2020 to 2021, giving homebuyers a higher cap before they jump into jumbo lending territory. Well – drum roll, please – the current compliant loan limit is set at $ 510,400, and it officially increases to $ 548,250.

This increase is important because it gives borrowers more opportunities to borrow funds at the most competitive rate levels, and having a wider purchasing range to avoid huge interest rates is a big advantage. Jumbo rates are typically at least 0.250% higher than compliant rates. Increasing compliant loan limits gives low down payment buyers more options to buy so they can avoid being overbid on a home.

These loan limit increases may also open up refinancing options for anyone who is currently a homeowner and has no plans to move anytime soon. Refinancing should always be a consideration when considering your financial goals for years to come, and many people refinance debt consolidation loans to help get things under control before things like vacation spending. It is also a little known fact that you can skip two mortgage payments when refinancing. This little bonus basically pays for any refinance loan cost!

Loan limit increases take effect in January, but you don’t have to wait to get started. We are currently processing several loan requests now using the new loan limits for January close, so if you are looking to browse your specific options, give us a call.

This weekly sponsored column is written by Mike Miles of Fountain Mortgage. Located in Prairie Village, Fountain Mortgage is dedicated to educating and empowering clients to make the best financial decision possible for their situation. Contact Fontaine today.

Mike Miles’ NMLS ID number: 265927; Fontaine Mortgage NMLS: 1138268


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