Have you decided that you are ready to buy your own home this year, and are trying to determine how you will finance your purchase? You have probably done research about conforming and non-conforming loans and heard that there are certain loan amount limits for each type of loan, and you may be wondering how that will impact the amount you will be able to borrow. If you are interested in purchasing a home in Jacksonville, Florida, and have questions about the conforming loan limits for the new year, North Star Mortgage Network, Inc. can help. Read on to learn more about the loan limit increase of 2022.
Understanding Conforming Loan Limits
A conforming loan is a common home financing option that helps borrowers buy a home and meets specific financial conditions and terms. Conforming loans are beneficial for borrowers because they can help you save money by offering lower interest rates. A conforming loan has limits that are set by government-backed companies that purchase loans from other financial institutions known as Freddie Mac and Fannie Mae. Conforming loans are mortgages that fall under the set loan limit and adhere to the conforming loan guidelines. The loan limits are adjusted every year in order to correlate to the changing real estate market, and are set by the Federal Housing Financing Agency, (or FHFA). Each region has a different conforming loan limit baseline to account for varying ranges in home prices in a particular area. In the event that a mortgage amount is higher than the loan limit, it becomes a non-conforming, or jumbo loan, which poses a higher risk to lenders and comes with stricter qualifying requirements, as well as higher interest rates.
Conforming Loan Limits Increased in 2022
This past year, housing prices have significantly increased, and the FHFA has also increased the conforming loan limits for the year 2022. The loan limits officially increase in the month of November each year, so many lenders last year already began issuing conforming loans for a higher amount. The current conforming loan limit for 2022 is $625,000, compared to the previous year’s limit of $548,00. If you are looking to purchase a home in a more expensive region, you may even be able to borrow up to $970,800.
Get Help Applying for a Conforming Loan
If you are interested in purchasing a new home this year in Jacksonville, Florida, and want to determine your best financing option and better understand how much money you will be able to borrow, the loan specialists at North Star Mortgage Network, Inc. can help. With the new conforming loan limits, the amount you will be able to borrow has increased, allowing you to help buy your dream home. Contact our office today for a consultation.