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Fannie Mae Increases California Conventional Loan Limits for 2018!

There is good news for home buyers and borrowers who want to refinance, as Fannie Mae just increased their Conventional California loan limits effective immediately for December 2017. This increase is a result of rising home values, so now borrowers can obtain better financing terms to purchase homes. Borrowers can now qualify for conventional financing up to $453,100, increased from $424,150k, and conventional jumbo financing to $679,650, up from $636,950. I included a summary of the best conventional low down payment loan programs below, and what a buyer can qualify for now with the new higher loan limits.

Increased Lending Limits for Conventional Programs Effective Immediately!

Fannie Mae increased their conventional loan limit up from $424,150 to $454,100. This means buyer can finance a home up to $454,100 with only 3% down.

In high costs areas, they increased their conventional jumbo loan limit up to $679,650, up from $636,950. This means buyer can finance a home up to $679,650 with only 5% down.

In San Diego for example, the conventional jumbo loan limit was increased from $612,950 to $649,750. This means a buyer in San Diego can finance a home up to $654,750 with only 5% down. This is great news for buyers who require higher loan amounts to finance their home purchase.

Each county in California has their own specific loan limit. You can check your new county loan limit HERE for Conventional and Conventional Jumbo financing.

Purchase a Home with Only 3% Down Conventional Financing and No Monthly PMI.

With these new conventional loan limits, a buyer can now finance up to $454,100 with only 3% down. Buyers also have the option to eliminate the monthly mortgage insurance “PMI” from their monthly mortgage payment.

All of the down payment can be gifted too, so this is a great option for buyers to purchase right away if they do not have the down payment saved up yet.

Click HERE for more information on how to qualify for the conventional 3% down program with No PMI, there is a Q&A section included.

Purchase a Home with Only 5% Down Conventional Jumbo Financing with No Monthly PMI.

With these new higher conventional jumbo loan limits, a buyer can now finance up to $679,650 with only 5% down. Buyers also have the option to eliminate the monthly mortgage insurance “PMI” from their monthly mortgage payment.

Buyers in San Diego County can finance up to $649,750 with only 5% down and No PMI.

Buyers in LA County, Orange County and SF County can finance up to $679,650 with only 5% down and No PMI.

All of the down payment can be gifted too, so this is a great option for buyers to purchase right away if they do not have the down payment saved up yet.

This is the best low down payment mortgage program in the market for buyers who require jumbo financing to purchase a home.

Click HERE for more information on how to qualify for the conventional Jumbo 5% down program with No PMI, there is a Q&A section included.

Update on Current Mortgage Rates

Mortgage rates ended the month of November lower than October, see below, so that is good news for home buyers in the market to purchase a home and homeowners looking to refinance.

Current 30-year fixed conventional rates are roughly 3.90%, 15 year fixed rates are at 3.25%, and 20-year fixed rates are at 3.625%.

With the tax bill looking like it is going to be approved by congress soon, this is something to keep an eye on. There is a good chance that rates may start rising as a result of this bill passing, as lower taxes and deregulation all add up to inflation, and inflation is the mortal enemy of bonds and low rates.

The Impact of Rates on Buyer Purchasing Power

Changing mortgage rates do more to influence home affordability than changing home prices. This chart below shows the “impact of rising rates on buyer purchasing power and affordability“.

Just an increase of .5% in rates can mean a buyers losing 5% in purchasing power.

For example, see how the payment at the 3.75% rate on a $400k loan, is almost the same payment as the 4.25% loan at $380k, a loss of 5% in purchasing power for a buyer.

Current Rates are Still Very Good, Compare Historic Rates by Decade

Current rates are still very good historically. This chart below puts current mortgage rates in perspective.

Did you know the average 30 year fixed mortgage rate over the past 40 years is roughly 8.7%, and 6.29% over the past decade!

Compare this to current rates around 3.9%. These current rates are still a gift and should be taken advantage of by anyone looking to borrow money to finance a home.

Compare this

It is still a great time to buy a home as the cost of borrowing money to finance a home is still historically very low. Also, buyers who purchase homes in the winter months always note there is less competition, so you can negotiate better terms with the seller.

If you have been putting off a refinance, I recommend locking in a rate soon. As mentioned above, with the new tax bill just passing, there is a good chance that rates may start rising, as lower taxes and deregulation all add up to inflation, and inflation is the mortal enemy of bonds and low rates.

If you have questions about any loan programs, or you would like to get a free rate quote, just let me know and I can run the numbers for you. I look forward to chatting soon.

P.S. If you would like to be updated faster on any important industry news or new loan programs that come out, please join my Facebook Page.

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This entry was posted on Saturday, December 3rd, 2016 at 8:23 pm and is filed under Fannie Mae Increases California Conventional Loan Limits for 2018!. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.