New Loan Limits Give Buyers More Spending Power in 2021
As we wrap up the last month of 2020, we have some good news to share for buyers and sellers in 2021 when it comes to mortgages!
Effective January 1st, the Federal Housing Finance Agency increases conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac.
That means buyers will have more spending power when purchasing a home. Each year, a conforming loan limit is set based on median home values, varying county to county.
What does that mean for you?
If you borrow within the conforming loan limit for your county, your loan meets all the criteria of Fannie Mae and Freddie Mac.
For home buyers that may mean that you will be able to take advantage of a lower down payment option and possibly lower interest rates and costs overall. For home sellers, that may mean that more buyers have the ability to obtain financing for your home if it is priced to obtain financing within these loan limits.
In the DC metro area (considered a high-cost area), the ceiling loan limit for one-unit properties increased from $765,600 to $822,375. For the Baltimore metro area, the standard loan limits increased from $510,400 to $548,250. Remember that these limits vary by county.
If you think 2021 is your year to become a homeowner, these new loan limits may add more ease and flexibility to the loan programs available. Keep in mind that there is no one-size-fits-all when it comes to home finance, so always make sure that your monthly payment and out of pocket spend meets your budget.
If you have questions about the new loan limit for your county, feel free to email me at jeng@firsthome.com
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