Higher Mortgage Limits In 2020 Make Buying/Refinancing Easier

Are you buying or refinancing a home?

Recent changes in mortgage loans may make it easier and cheaper to borrow.

For 2020, conforming mortgage loan limits are rising to $510,400 in most areas and $765,600 in high cost areas like Washington D.C. (The max amount first started at $417,000 after the real estate meltdown and has been inching its way upward ever since).

When you buy or refinance, using a conforming loan will help you keep mortgage loan costs down, and make the loan easier to obtain.

So what exactly is a conforming loan?

A “conforming loan” is one that does not exceed the dollar amount established by the Federal Housing Finance Agency (FHFA), and also meets standards set by government-sponsored enterprises like Freddie Mac and Fannie Mae.

That makes these loans eligible for government-sponsored guarantees, which keeps housing more affordable.

A conforming loan – one that does not exceed $510,400 in most areas of the U.S. – will have slightly lower interest rates than a jumbo loan, which is a larger mortgage exceeding the $510,400 ceiling.

The new, higher loan limits mean you can afford today’s home prices, and still benefit from lower rates and streamlined processing.

Financial Tip: What’s the maximum conforming loan amount in your area? Check here on this handy map.

About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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