I have some good news for us today. January 1st of 2020, all of the loan limits changed. Here’s the good news, they went up. So what that means is FHA, for example, the limit for the amount of money FHA will loan you for a house is now $404,000. I’m going to have to look this one up because it was so strange. 404,800. Who came up with that, right? So FHA loan, you could put down 3.5%, which is what makes the loan so valuable is because it doesn’t take a lot of down payment. So, for first time home buyers, this is a really good loan for them because it allows them to get into a home with the least amount of upfront money, right? So this now equates to about a $420,000 house purchase, putting down 3.5%, get your loan down to into FHA range that they’ll loan for you. So somewhere about 418, 418,000, 420,000, somewhere in there, will get your loan limit down.
Conventional, also raised. There’s is now 510,400. Seriously, who comes up with these numbers? I don’t know. So that now equates to a $570,000 purchase putting down, say, only 10%, would get you down to that conventional loan limit of 510,400. If you want to put down more money, say put down 20%, well, you can just buy a much more expensive home and bring your loan down to conventional. The reason you want that is because your interest rate is usually a little bit lower on a conventional loan than say a jumbo loan, meaning a home that would be a loan amount of more than 510,000. Your lender can tell you a lot more about this, but that helps you kind of figure out how much money you can spend and stay inside the conforming rates.
And then for VA’s, for our veterans and don’t we owe them everything? Their loan limits now have gone away all together. They can buy whatever house they want to buy for as much money as they want to buy. There are no loan limits anymore on a VA loan. So that was really a cool thing that passed this year. So those are your new loan limits and your new abilities to buy a home for 2020 and beyond. I’m sure those limits will go up as they do over a period of time. We’ve seen those limits go up from, gosh, FHA used to be in the 200’s and now here we are in the 400’s. So really quite a bit of buying power for a home buyer now, which is great.
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