The Federal Housing Finance Agency (FHFA) just announced that they will be raising the maximum conforming loan limits in 2019. This is a direct reflection of rising home prices, and it’s another way to help more home buyers qualify for loans.
Throughout the country, this laregly affects buyers in the mid-range, including a lot of people who may be looking to move up from their starter homes. In San Diego County, these new limits will also help many first-time buyers because the median home values here have gone up so much in recent years.
What is a Conforming Loan?
First, it’s important to understand that these new limits apply only to mortgage loans backed by specific government housing agencies, including Fannie Mae, Freddie Mac and Ginnie Mae. More than 90 percent of home loans in America are backed by these agencies, so really these limit increases affect a large majority of mortgage loans being approved by lenders.
In 2018, the conforming loan limits jumped 6.9 percent. In 2019, we’ll see another 6.9 percent increase in most counties. However, it is important to understand that some higher-priced counties in the country, including San Diego County, are treated differently. The conforming loan limit increases reflect higher home and rent prices.
San Diego County Limits
In San Diego County, the conforming loan limit will be set at $690,000 starting in 2019, which represents another significant raise. By comparison, Orange County and Los Angeles County will get the max limit increase of $726,525 while most counties in the U.S. (including other Southern California counties like Riverside, San Bernardino or Imperial) will fall under the minimal category with a limit of $484,350.
Such loan limit increases are yet another natural part of the real estate cycle. As home prices go up, so will the loan limits on conforming loans. Mortgage rates have also been on the rise this year. Ultimately, that will likely slow down the home price growth as things start to level out.
How Will This Affect You?
For San Diego County home buyers, the conforming loan limit increases in 2019 should open up more buying opportunities in the low- and mid-level markets throughout the area. However, it’s important to still stay within your own budget. Just because you can qualify for more and the limits are increased, it still may not be the right move for you.
Having an experienced mortgage team on your side will help you make the right home financing decisions and find the ideal loan terms for your specific buying or refinancing situation. Call Transparent Mortgage today at (619) 929-0199.