New Loan Limits
We all know how crazy this last year was with home values skyrocketing especially in the areas of Miami-Dade County. This not only effected borrowers, cash-buyers and real estate agents, but also loan limits.
1). Conventional Loan Limits. The new Conventional loan limit for a Single-Family Residence is $647,200. This goes all the way up to $1,244,850 for a multi-family property. Last year, the SFR loan limit was $548,250, so this is a substantial increase of almost $100,000. This means that somebody applying for conventional, QM financing, with a loan amount of $647,200 or less, will receive top tier pricing and be considered in the QM range. Anything over that is considered a high balance or Jumbo loan and pricing will be different as such.
Loan limits depend on the county and every county in Florida has the above loan limits, except Monroe County with the loan limit of $710,700 for a SFR up to $1,366,750 for a multi-family property. Below is the map of the continental US showing which counties have higher loam limits by state.
2). FHA Loan Limits. The New FHA loan limit for a Single-Family Residence is $460,000. This goes all the way up to $884,600 for a multi-family property. FHA loans are government loans that are allowed on 1 to 4 living-unit properties. These can be used if the owner occupies the unit, or in the case of a multi-family, they must occupy one of the units.
Mortgage Rates Rising due to fed announcement
Although nobody truly knows how mortgage rates will change in the future, there are certain events that occur that give us a good approximation.
The fed suggested that there were multiple rate hikes coming in 2022. They are looking to fight inflation, which rose to its highest level since 1982, and signaled that beginning in January, it will cut its monthly buys of MBS, or Mortgage-Backed Securities (Mortgage Bonds), by half. It is predicted that the average 30-year fixed rate will be around a 3.200% with the 15-year fixed rates to average 2.500%. Today, January 4th, the average 30-year rate is a 3.290% and the 15-year is 2.640%, so it seems as though these predications are on track. Higher inflation erodes the return that an investor on a bond or loan is holding over time, making the bond values go down and yields rise.