Round Thanksgiving of every yr, Freddie Mac and Fannie Mae and the Division of Housing and City Improvement announce the utmost mortgage quantities that they are going to settle for from lenders for the following calendar yr. These mortgage limits are known as ‘conforming’ mortgage limits and so they usually have the bottom charges and essentially the most relaxed underwriting tips out there for fixed-rate mortgages. Processing loans with the brand new mortgage limits for 2021 might start now however might not shut till after Jan 1.
Refinancing householders and homebuyers profit from these larger mortgage limits as underwriting tips for conforming loans are usually extra lenient than for the jumbo loans. Whereas the brand new conforming mortgage restrict for single-family houses in Santa Cruz County will probably be $548,250, up from $510,410 in 2020, mortgage quantities from $548,250 to $822,375 are thought-about within the “expanded” class and carry barely larger charges.
Mortgage quantities higher than $822,375 are thought-about 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% larger.
Historically, these mortgage limits observe the nation’s median house costs. When the house costs go up from one yr to the following, the conforming mortgage restrict goes up and vice versa. After I began originating loans in 1986, the conforming mortgage restrict was set at $133,250. By the best way, the typical house worth in Santa Cruz County in 1986 was $153,000. In October of this yr, the typical house worth was $1,200,704, in keeping with the Santa Cruz County Affiliation of Realtors’ web site.
These mortgage limits range from county to county. For instance, in Monterey County, the place median house costs are lower than Santa Cruz County, loans higher than $739,450 are thought-about jumbo loans.
New mortgage limits for FHA loans this yr matched this yr’s mortgage limits for Freddie Mac and Fannie Mae loans. New mortgage limits for FHA in 2021 will in all probability match the brand new mortgage limits that Freddie Mac and Fannie Mae simply introduced this week for subsequent yr. FHA loans supply the low down fee possibility of simply 3.5% and settle for present funds from relations for the down fee. FHA loans can be found for any homebuyer or home-owner with out revenue restrictions. FHA doesn’t require debtors to be first-time homebuyers.
Native mortgage guide Peter Boutell has been penning this column for the Sentinel since 1995. Ship inquiries to Peter@SantaCruzHomeFinance.com.
— to www.santacruzsentinel.com
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