New Conforming Loan Limits and Rates Continuing to Cooperate

I have a few industry updates to share with you today! First, Fannie & Freddie announced the 2024 mortgage limits for conventional lending.

As most people know with these loan limits, some counties have high balances. The way it works is: throughout the entire US, you can get a conventional loan up to $766,550. There are certain high-cost areas, such as San Diego, LA, and Orange Counties where the loan limits change.

Tool for Calculating Loan Limits, Payments, Interest, and More

You can use this tool for more information. Enter the state and county you are looking for, then it will tell you what the loan limit is for that area. One added feature is a slider that allows you to pick an interest rate and it will show you what the principal and interest payment is for all these different areas.

You’ll also see that the loan limit goes up depending on how many units are on the property. It goes up to 4 units, because if there are more than 4 units then it’s classified as a commercial property and it’s a whole different situation.

We will be adding FHA to this tool as well. So, you can get even more information going forward. It’s a cool tool and we encourage everyone to use it.

Interest Rates are Coming Down

Another piece of news: rates are continuing to cooperate. We are down a whole percentage point compared to the peak of this cycle that we hit around the last week of October. We’re seeing a significant improvement since then.

We were in the 8-point range a month ago, and now we are seeing a lot of rates in the mid- to low-7’s.

In actual dollars: a 1% change in the interest rate on a $700,000 mortgage is about $670 per month. This difference is very significant in terms of monthly cashflow and how much of a mortgage you can qualify for. Of course, everyone is wanting to see interest rates in the 4 – 6% range, but in the meantime this improvement is a big deal to be back in the 7-range again.

What’s Your Trigger?

I talked in my last video about “what’s your trigger?” If you’ve been sitting on the fence and waiting for interest rates to come down, then this change might be a good trigger to make your move. As rates continue to decrease, there will be a point where everyone jumps into the market – and you don’t want to wait for that.

As always, I’m here to help if you have questions about buying a home. Reach out any time for personalized recommendations!