If you’ve been on the sidelines for residential financing, or you’re thinking about doing a loan, and you’ve had some difficulty as it relates to borrowing money for home mortgage financing. The new loan limits for 2022 could help bridge the gap from where you are to where you’re going in support of your financial goals. Here are some things to be aware of as it relates to the changes that were just recently unveiled.
Conventional financing conforming loan limit has now been raised to $647,200. This represents a change to the loan limits for 2020 that were previously at fewer previously at $548,000. This change allows families to purchase a house with as little as 3% down based on the county in which they are desiring to purchase for conventional financing. Or, 5% down on the maximum high balance loan limit in the area which they’re looking so for example in Sonoma County California that limit is now $764,000. So, the conforming high balance loan limit is anything above the conforming loan limit in the area in which the house is located so a family and can finance a house all the way up to $764,000 for a first mortgage and still attain conventional financing which is easier to come by than other types of loans such as jumbo loans for example. This points to the growing trend of increasing loan limits as a result of an exuberant housing market.
The same low limit is now applicable on both FHA and VA loans as well. It’s going to be specific to the area and the county in which you’re looking to purchase so once again for FHA loans and VA loans in Sonoma County California the maximum high balance loan limit is $764,750 while the conforming loan still is at $764,000. One thing to be aware of, the VA does not specifically have a loan limit any longer. Loan limits as it pertains to VA loans is only in the calculation of the VA entitlement as the VA specifically has no loan limit whatsoever. If the military veteran has Entitlement eligibility necessary to procure VA financing. So as a reminder VA loans have 0% down payment required, and FHA loans only require a 3.5% down payment requirement. All the above for conventional loans and for Fannie Mae. FHA loans and VA loans all of which this is all predicated on single family, one-unit properties. This means if you’re looking at a multifamily such as a 2 unit, a 3 unit, or a 4-unit type of property the loan limit is bigger for that type of property as there’s more units which supports a higher loan limit size in the area and county in which you’re seeking to purchase or refinance a home.
So that being said if you’re looking for financing, or trying to better understand what the loan limits mean in relation to the down payment and credit and cash that you have to work with as a home buyer or a responsible homeowner looking to refinance their loan, work with a local lender who can walk you through the ins and outs of the loan limits and how the loan limits for 2022 might be applicable to your unique and specific situation.
If you’re looking to refinance start today with a no-cost loan quote for refinance now!