New Conforming Loan Limits Are Now In Effect
Effective this past Saturday, October 1, the new conforming loan limits assumed their new role in our market. Current loan limits are now at $625,500, from the $729,750 “holiday” limit we’ve been at.
What does this mean?
It means for anyone with a house to sell with a price over $625,500 – your new buyer pool may be smaller! Here’s why:
As a buyer, the interest rates you hear about are almost always for loans under the conforming loan limit (in this case $625,500). That means the amount of your LOAN (not the SALE price of the home) must be under $625,500. Which means if you’re purchasing a home above that price, you’re left with two options:
1. Put enough cash down to get your loan to $625,500 to get current interest rates (right now about 4%)
2. Shop for a jumbo mortgage interest rate loan (typically higher than a regular conforming loan limit)
The change in loan limits will impact our market in 3 ways:
1. Your monthly mortgage payment for a jumbo mortgage is now higher.
2. Your out of pocket costs to purchase a home above $625,500 may be higher
3. The amount you now qualify for may be less.