New, higher compliant loan amounts have been announced for 2021. Many lenders are now offering the new guidelines.
The new compliant loan amount on single family homes is $ 548,250. This replaces the limit of $ 510,400, an increase of $ 37,850.
This is great news for people with an existing jumbo loan as they are now able to refinance at a lower interest rate by choosing a compliant loan amount.
Additionally, home buyers can use the increased loan limit to purchase at higher prices, but take advantage of the current loan interest rates. A home listed for $ 685,000 can be purchased using a conforming loan of $ 548,000 with a 20 percent down payment.
Financial tip: You can split the loan amount and get the first lien at 80% of the value of your home and a home equity loan for the rest of what is funded.
The increase in conforming loan amounts is a positive sign that home values have increased, giving homeowners more equity in their homes.
Talk to a trusted mortgage broker to assess your options. So many positive changes have taken place over the past few months that it’s worth taking the time to check out what’s best for you.