Newsflash! Conforming Loan Limits are $625,000 beginning on January 1, 2022!!

Many people are paying on mortgages that fit the guidelines of being jumbo loans. Starting on January 1, 2022, the new loan limit is $625,000 instead of the 2021 limit of $548,250. What does that mean to you? That means most borrowers will be able to afford a larger or better house because the rates are still very low, the values of the homes are continuing to rise and the limits on conventional, conforming loans will go up. It also means that for people that need more cash flow and are either in a fixed, jumbo loan or an adjustable jumbo loan, now is the time to refinance, get that cash-out, use the money for repairs and quite possibly lower your monthly payment. However, WHY WAIT?! You can lock in your rate NOW. All you need do is contact a loan officer at 7^th Level Mortgage. He or She will guide you through the entire process. I have mentioned to scenarios above and now, since seeing is believing, I am going to show why NOW is the time to lock into these lower rates.

In this scenario, you are purchasing a home and you are closing in 45 days. The purchase price of the home is $781,250 and you are putting down 20%. The loan amount is $625,000. The thirty-year jumbo rate on average is 3.22%. The monthly p&i payment is $2,710. With the uptick in loan limits and the average 30 years fixed-rate mortgage rate being 2.25%, the payment is $2,389. The payment difference is $321.00. Over seven years, the average homeowner keeps his mortgage, the saving is $26,964.The reason becomes obvious as to why you would want to lock in now for a better rate, more breathing room, and the extra cash can come in handy when you are trying to buy new furnishings, put away money for an emergency, or even a vacation.

In the second scenario, you have called a lender about refinancing your jumbo loan into an ARM product to obtain a lower payment and possibly pay off more debt, like credit cards and possibly an auto loan. You are on the right track, especially if you have called 7^th Level Mortgage, however, with the rise in the conforming loan limits, while you may be saving money with an ARM, how about a fixed-rate mortgage where you are only paying fees and costs, ONCE instead of having to potentially refinance or recast your mortgage in a year? In a cash-out scenario, this change can save you even more. Suppose you have a mortgage balance of $600,000 and a credit card balance of $25,000.

Here is how the numbers will potentially work out:

Mortgage Payment @ 3.22% = $2,601
Credit Card Payments @ 16.28% = $342
[Credit Card Interest Paid Out = $96,653 (assuming you are making payments over 30 YEARS!)]

With new loan limits at $625,000 you are:

Paying off the mortgage and the credit cards and your payment is $2,389 per month and your savings over 7 years are $554 per month or $46,536 and an additional savings of $96,653 in interest that you wouldn’t be paying over 30 LONG YEARS!

The loan officers at 7^th Level Mortgage can help you the entire way from the application, through processing, underwriting, and closing so you can live a more comfortable life, sleep better, and have more time and money for things that you want.

Photo Credit Pexels