Two Ways to Benefit From the 2020 Loan Limit Increase

Interest rates on home loans that conform to the Fannie Mae and Freddie Mac guidelines tend to be lower than non-conforming loans.  That’s why it’s good news that the Federal Housing Finance Agency (FHFA) recently announced that the conforming loan limits have increased to $510,400 in 2020.  This is a $26,050 increase from the $484,350 loan limits of 2019.  In some higher-cost areas, the loan limits could be as high as $765,600.  Click here to view a map of all the loan limits across the US. As for loans insured by the Federal Housing Administration (FHA), the loan limit for low-cost areas went up to $331,760, and the loan limit for high-cost areas went up to $765,600. There are also some special exception areas such as Alaska and Hawaii with higher loan limits. Here are two ways to benefit from this increase:

1 – Consider Refinancing
It may be worth it to consider a home loan refinance if:

  • You currently have a home loan that is near the loan limit
  • You’d like to make some home improvements
  • You’d like to consolidate other debts into your home loan (such as home equity loans or credit cards)
  • You’re paying mortgage insurance and your home has increased in value considerably from the time when you purchased the home
  • You anticipate a change in your cash flow situation in the coming months (college funding, retirement, elder-care, etc.)

2 – Consider Buying a New Home
Interest rates are still very attractive, and home prices are still affordable.  It may make sense for you to consider a new home purchase in 2020.

Contact us for more information or to run the numbers for your specific scenario.

About the author

ALG Mortgage was founded by a team of local entrepreneurs with deep roots in the mortgage, real estate, banking, public accounting, and digital marketing industries. As an expert independent mortgage agency, we are not tied to any one lender in the industry, allowing us to truly act as partners for the clients we serve, and ensure they end up in the absolute best option for their own personal situation.

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