It’s no secret that the housing market is extra challenging at the moment. The working-from-home movement, as well as changing priorities for families means that demand for luxury and larger family homes is surging. And what does any surge in demand result in? Higher prices of course.
Many home buyers have been frustrated to find that they are priced out of their dream home or preferred area. Often, if they can afford the list price it becomes irrelevant as bidding wars escalate to unprecedented levels.
The good news from the financial sector this week is that big lenders like Fannie Mae, Freddie Mac, and FHA have announced extended loan limits for 2022. In response to rising house prices home buyers can now borrow more, and afford more expensive properties than ever before.
Fannie Mae and Freddie Mac floors are now $647,200, going up to $970,800 for Higher Cost Areas for One-Unit Properties. FHA floors are now $420,680 and High-Cost Ceilings to $970,800 for One-Unit Properties. Prior to the 2022 increase, these higher loan amounts fell under a Jumbo loan which meant higher down payments and more stringent credit requirements. Designed to combat the rise in property values, these increased limits are now available under FHA and conventional programs and could be a lifeline for those stuck in a house they have outgrown or looking to move to a more expensive area.
The even better news is that with these changes, buyers can feel secure that, while they can borrow more, they are less likely to overstretch themselves than with mortgages in the past. Because after the 2008 housing crisis, this is a common concern among homebuyers.
Thanks to new laws and regulations (e.g. July 2010’s Dodd-Frank Wall Street Reform and Consumer Protection Act), and the institution of government agencies such as the Consumer Financial Protection Bureau, there is better underwriting on loans, and more in-depth affordability checks and requirements for borrowers. Homeowners can feel safe in the knowledge that they can borrow more, just as safely as ever.
About Michigan Lender, Julie Krumholz
With 35 years of industry experience, Julie Krumholz has worked in nearly all aspects of mortgage banking.
Throughout the years she has worked in processing, closing and loan origination, underwriting, QC auditing and has even co-owned a mortgage brokerage firm.
If you are looking for an experienced Lender in Michigan, call Julie from Superior National Bank today at: 586-382-5482 and let her help you navigate through the loan process and answer any questions you may have.