Now you can buy more house with a regular conforming loan as the loan limit increased to $453,100. New higher loan limits, which take effect Jan. 1, were increased as a result of rising home prices for a second straight year.
Why is this good news? Because the conforming loan limit is the maximum amount buyers can borrow before they have to consider the jumbo loan option which carries higher costs and more stringent underwriting requirements. Buyers now have almost $30,000 more to spend and still be able to use the conventional loan with lower-costs and more flexible underwriting. Conventional loans are backed by the federal government (Fannie Mae and Freddie Mac).
Sellers should be happy too. If buyers have access to higher loan amounts through conventional lending they can afford higher-cost homes.
The increase is a reflection of the healthy housing market that has seen prices rise over the last three years.
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