Conforming Mortgage Loan Limits Dropping
With the drop in home values nationwide it is making an impact on future loan values as well. High-cost areas across the country are calculated based on average home sales price in the area. With values dropping 14% or more the maximum loan amounts too are dropping.
Starting on October 1, 2011 the loan limits above $417,000 in high cost areas is dropping. The previous maximum loan size as dropped over 14%. The previous loan limits were in place in 2008 and calculated prior to the home values plummeting.
This change is extremely important to those that need to live in the high cost areas such as New York and Los Angeles and other similar high cost areas.
Now instead of the previous $729,750 loan limit you are now subject to a maximum loan size of $625,500. Now this should not make a huge impact since the home values have decreased which means you can purchase the same home now as before with the lower value and still fit in the lower loan limits.
You can see the complete list of high-cost areas online. If you have any questions simply contact a loan officer and find out first hand for free. There is no cost or obligation to visit with a loan officer. If there is a cost simply walk away and find another.