Tuesday, November 28, 2017

FHFA Announces Maximum Conforming Loan Limits for 2018

(Press Release - click here to visit the original article)
Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2018. In most of the U.S., the 2018 maximum conforming loan limit for one-unit properties will be $453,100, an increase from $424,100 in 2017.  
Baseline limit
The Housing and Economic Recovery Act (HERA) requires that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price.  Earlier today, FHFA published its third quarter 2017 House Price Index (HPI) report, which includes estimates for the increase in the average U.S. home value over the last four quarters.  According to FHFA's seasonally adjusted, expanded-data HPI, house prices increased 6.8 percent, on average, between the third quarters of 2016 and 2017.  Therefore, the baseline maximum conforming loan limit in 2018 will increase by the same percentage.  
High-cost area limits
For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit the maximum loan limit will be higher than the baseline loan limit.  HERA establishes the maximum loan limit in those areas as a multiple of the area median home value, while setting a "ceiling" on that limit of 150 percent of the baseline loan limit.  Median home values generally increased in high-cost areas in 2017, driving up the maximum loan limits in many areas.  The new ceiling loan limit for one-unit properties in most high-cost areas will be $679,650 — or 150 percent of $453,100.  
Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands.  In these areas, the baseline loan limit will be $679,650 for one-unit properties, but loan limits may be higher in some specific locations.
As a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2018 in all but 71 counties or county equivalents in the U.S.   
Questions about the 2018 conforming loan limits can be addressed to LoanLimitQuestions@fhfa.gov.
  • For a list of the 2018 maximum loan limits for all counties and county-equivalent areas in the U.S. click here.  
  • For a map showing the 2018 maximum loan limits across the U.S. click here.   
  • For a detailed description of the methodology used to determine the maximum loan limits in accordance with HERA, click here
The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.9 trillion in funding for the U.S. mortgage markets and financial institutions. Additional information is available at www.FHFA.gov, on Twitter @FHFAYouTube and LinkedIn.
Media: Stefanie Johnson (202) 649-3030 / Corinne Russell (202) 649-3032
Consumers: Consumer Communications or (202) 649-3811

Monday, November 6, 2017

The Top 4 Reasons Why A Loan Doesn't Go Through

1. Credit Scores
This is probably the scariest and most common reason why people's applications won't go through - but this is exactly WHY you should talk to a Loan Officer early in the process, they can set you in the right path in case you don't have a perfect credit score. Also, there are products that only need a mid 600 score which a lot of people don't know. The sooner that you address this problem, the sooner that you can fix it and move on with the process of buying a home. 

2. Debt to Income Ratio
This is something that can be a little hard to understand but basically if you have too much credit card debt or maybe an auto payment that is high compared to the amount of income you earn every month, you may not qualify for the amount that you'd like. Yes, you may still qualify but knowing how much you qualify for is important when shopping for a home. Speak to a L.O. before you start home shopping and figure out what you can afford. 

3. Cash Due at Signing
Depending on the type of loan that you get, you may be required to bring a lump sum of cash to closing. There are programs that allow you to bring 1-3% and then there's other programs that require 20%. The more you put down, the lower the interest and the shorter loan you can get. Either way, it's important to have some money set aside for closings costs and unexpected expenses. 

4. Change in Employment / Financial Responsibilities
If you lose your job while applying for a home loan or if you buy a car or open a credit card while in the process of getting a loan might affect your chances of getting one. This can also be a factor even if you decrease the number of hours that you're working. For example if you were working full time and then end up working part time or maybe you're just not working enough hours. These are all different scenarios that could prevent your application from getting approved in the end. 

This list is a short one, but it covers some of the basic things you want to fix to avoid doing when you apply for a home loan. Even though some of these circumstances are unexpected, some can prevented or you can prepare for them. If you have any questions about any of this, please make sure to give me a call so we can get you straight for when you decide to apply!