Conforming Loan Limit Increasing in 2022 - Video Newsletter 10-20-2021 - YouTube

Hi Mortgage Heroes Andy Cruz here in business development and this is your weekly video

newsletter. Today, we're going to talk about some exciting news regarding the conforming

loan limits for 2022, but before we do, make sure you hit that subscribe button, make sure

to like this video and hit that notification bell so that every time we drop a new video,

you hear about it first. Alright let's get right into this week's video

newsletter topic, and it is all about conforming loan limits coming out in 2022. Now traditionally

these loan limits come out in November of the year prior to the turn of the new year,

and it is no different this year. As of November 1, It is expected that the new loan limits

are going to come out and we have a doozy for you. As you know the loan limit for 2021

was a $548,250. We are seeing one of the largest loan limit increases, just around the corner.

Coming on November 1, 2021, it will be announced that in the year 2022 the conforming loan

limit will be $625,000 for a single unit property. This marks one of the biggest percent gains

ever, and the actual largest gap between the former years loan limit to the upcoming years

loan limit marking just a bit more than $75,000. Now part of this of course is just a reflection

to what's been happening with home appreciation what's been happening with loan balances,

and this is you know Fannie Mae and Freddie Mac's way of meeting the home ownership tension,

where we want to maximize homeownership for how many people can afford it, we also need

to be in line with what the actual market rate is for properties and homes, and then

balancing what the interest rate is with the loan amount and the purchase price and the

ability to pay all mixed together to come up with these limits.

Now, what you can see from the chart here is for many years our conforming loan limit

was stuck around $417,000 And I say stuck but really what it meant is, it was reflecting

that there wasn't a need for it to be any higher or lower, because this covered the

majority of counties across the United States.

What started to happen in 2017 Is there was a little bit of an uptick in pricing of homes,

and therefore the conforming loan limit had to coalesce, which meant that you started

to see some mild and incremental increases of the conforming loan limit in 2017 2018

19 20 21, etc. Now what you're seeing is a huge jump between 2021 and 2022, simply to

cover the difference of the median home price that has spiked over the last 18 months, matched

with the low interest rate environment that's escalated and pushed home values up over the

same duration of last 18 months. And that's how we get to this new conforming loan limit

of $625,000, and really what this means is, in loan balance territory that used to be

considered high balance or jumbo, this is not your conforming loan limit for loans that

Fannie Mae and Freddie Mac are going to stand behind and issue guarantees for, this is a

really really interesting and exciting time because there's really two main people here

that are going to be most positively affected. The first group is people who are looking

to buy a home right now. If you're looking to buy a home and you were kind of stuck at

that conforming loan limit of $548,250 Well, that now just got moved on with the $625,000.

Now of course, your credit and your income stuff to qualify you for that. However, the

big deal about this huge increase has to do with the fact it's still called conforming

versus jumbo and conforming rate pricing has always traditionally been lower than your

jumbo and your high balance mortgage interest rates.

Now this is also important to the second category of people who are looking to refinance. Now,

maybe your loan was $550,000 or, maybe $600,000 on the nose, and that was jumbo pricing and

high balance pricing but as far as the interest rate is concerned, well not anymore. Starting

now, we actually have two banks already issuing guidance and underwriting policy on giving

the conforming loan status to loans, all the way up to $625,000 starting now. Even though

we haven't gotten to 2022 yet, we already have two banks in our back pocket that are

issuing this guidance today for those of you who are looking to refinance, whether it's

a rate and term refinance or the cash out refinance and your loan is above the $548,250

and below the $625,000 you're going to be able to get a conforming loan limit interest

rate now. Obviously you can tell I'm really excited about this news I think this is going

to help a lot of people, especially in the cities that are the dense urban areas your

Top 50 Top 100 cities across the United States. Well, guess what San Diego is one of those,

guess what a lot of the other counties in Southern California are also those, and that's

where all of you come in, you know our past clients and our friends and family and all

the people that we do loans for, you know, there's a consolidation of you all in this

general area. And it's really important for us to be able to always deliver good news,

number one. How you can win in real estate and mortgage, number two. But when things

like this change and therefore, the better they help close the gap between will say the

haves and the have nots when it comes to real estate. This is a really really big move,

and I think this is going to help a lot of people who may be on the sidelines wondering

what they should do. I hope this has put just put you back in the game. For those of you

who were maybe waiting for better information about loan rates, or whether you should refinance

during a certain time or for a certain reason. I think this is definitely something you should

look at if you were already considering doing your refinance before the end of the year.

Yes, this, this, this will exist into 2022, but look back at the other videos we've been

talking about, we've been talking about the market rate increasing because of other functions

of Fed policy and economics weighing down on mortgage prices. This difference between

the conforming loan limit allows some of these higher balance loans now to be treated with

the conforming definition, which by default does come with a lower interest rate than

a jumbo interest rate. And when you step back and take the 30,000

foot view on this, I'd much rather take the conforming loan rates in an increasing rate

environment than the jumbo loan rate at an increasing rate environment.

And that's really the takeaway here today is if there's something in this video that

speaks exactly to the situation you're in, where this solution in the marketplace now

helps close that gap between what you could do before, and what you are what you couldn't

do and now what you can do. This is the time to have that conversation please let us know,

talk to your loan officer, you can call us, you can DM us you can leave a comment below,

just send us an email. Let us know how we can help you win we want to see win, especially

as we come into the end of the year. Let's go out on a high note, I’m really excited

to share this news with you guys today. Thank you so much for watching be sure to share

this video with people you work with friends family neighbors people you associate with

who need to know this information and make their next best choice to. Thanks for watching

and we'll see you again next week.