New Jumbo Mortgage Limits for Utah

Well, it just got a whole lot easier for Utah Home Buyers to borrow large amounts of money. Fannie Mae and Freddie Mac, the 2 governmental agencies chartered to purchase and oversee mortgage lending increased the loan limits for conforming mortgages. On the heels of similar increases from the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac have now made it easier to purchase larger homes for lower interest rates.

What is A Jumbo Loan:

A traditional mortgage in the United States, in order to have the best possible interest rates, must conform to certain standards and guidelines. These Conforming Loans are subject to a limit that is determined by local median prices. While the conforming limits have increased slightly over the years, the increases have not matched appreciation in most areas. In Utah, however, we have been doing alright. The Conforming limit in most of the state has been $417,000. In other words, as long as you borrow less than $417,000 you can get the best interest rates. Any loan above the conforming limit is considered a Jumbo Mortgage. The problem with Jumbo loans is that the interest rate is typically quite a bit higher than a conforming loan.

The Good News:

In Salt Lake, Tooele, Summit and Wasatch counties the Conforming loan limits have increased, making it easier for individuals with higher end homes to qualify for less expensive mortgage rates. Bellow is listed the new limits for the State of Utah:

• Salt Lake County: $729,750
• Tooele County: $729,750
• Summit County: $729,750
• Wasatch County: 431,250
• The Rest of the State: $417,000
  

What That Means:

By increasing the conforming limits it is now easier for home owners to access equity for debt consolidation, remodeling and investing. More significantly, home owners with larger loans can lower monthly payments, thereby increasing their personal cash flow allowing for the acceleration of debt settlement or debt avoidance. For example someone with a $500,000 mortgage is now looking at an interest rate around 6.25%, whereas before that same borrower was facing an interest rate around 7.5%, which can represent a payment difference of around $400 per month.

As always, if you have specific questions about how this might affect you, shoot me an email, I will be happy to discuss your own situation and ensure that you are taking full advantage of what is available. Jayhart@cottonwoodmtg.com