So what does this mean for you as a buyer? Well, if you're planning to buy in most of the country, if the cost of your new home purchase was over $647,200 but under $726,200, you no longer need to qualify for a jumbo loan. In high cost areas like SWFL's gulf coast, however, if your home costs less than $1,089,300, you no longer need to qualify for a jumbo loan. That means that nationwide, more than 2 million U.S. homes no longer require a jumbo loan, according to a new analysis by Zillow Home Loans.
If you're one of the home buyers that now qualifies for a conventional loan, you can use mortgage-bankers Fannie Mae and Freddie Mac to finance your mortgage. Conventional loans require a minimum credit score as low as 620, while jumbo loans require a minimum score of 700. Also, jumbo loans often require 20% down, although some call for even higher down payments. Some jumbo loans also will require proof of larger cash reserves than conventional loans (up to 12 months’ worth). Conventional loans require as little as 5% down (with PMI) or, in very special circumstances, only 3%. That's obviously a big difference in a down payment you won't need to come up with.
This is obviously good news for home buyers who require mortgages, especially after being hit with the double whammy of a slowing economy and soaring inflation. It's especially good news for buyers in the SWFL market, where prices run well above the national average. Contact us as licensed realtors to find out how you can take advantage of this change.
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