On Tuesday, the average mortgage rate on the very popular 30-year fixed-rate home loan dropped by two basis points. On 15-year fixed-rate loans, the rate was one basis point lower, and in the case of 5/1 Adjustable Rate Mortgages, there was no change. This is according to a NerdWallet poll of daily rates released by national mortgage providers.
To see this in perspective, the 30-year fixed-rate mortgage has now dropped by three basis points in the last week and by 27 basis points over the last year. One basis point represents one hundredth of a percent.
The situation in the mortgage world is set to change fairly significantly at the start of next year. First, the maximum amount for a government-guaranteed loan will be higher. Second, in the biggest part of the nation, the maximum loan amount for a mortgage backed by Freddie Mac or Fannie Mae will increase to $453,100, which is about 6.8% more than the $424,100 of this year. A home loan that is higher than this amount is considered to be a jumbo loan and can therefore not be underwritten by Freddie or Fannie.
Exceptions will be made in the case of high-cost markets, however. In those areas of the country where home prices are particularly expensive, including Los Angeles, San Francisco, and Brooklyn, the conforming limit will increase to $679,650 next year, which is also around 6.8% higher than this year’s figure.
There are a few metropolitan areas in the United States that are more expensive than the average, but not quite to the same degree as cities like San Francisco or Los Angeles. These metros have limits that fall somewhere between the baseline conforming limit and the maximum. One of them is Seattle, where the limit will be $667,000 next year. In Hawaii, Alaska, the US Virgin Islands and Guam, the limits will be at least $679,650 or more depending on the local circumstances.
Use our mortgage calculator to determine how much you can afford to borrow, and do not forget that we offer a mortgage pre-approval facility.
Visit us online to receive a custom rate quote on one of our competitive home loans including Conforming Loans, Non-Conforming Loans, Government Loans, Portfolio Loans, Jumbo Loans or Super Jumbo Loans online or by calling us at 1.888.546.2634 to speak with a Mortgage Consultant today.