With home prices, UP 6.9% on average in the in the U.S., The Federal Housing Finance Agency (FHFA) has raised the loan limits UP to $484,350. FHFA has increased the maximum conforming loan limits for Fannie Mae and Freddie Mac to $484,350 up from $453,100 last fiscal year. Ok, so what does that mean to the average “Joe” like you and me? Simply put, most all mortgages/loans, after you buy your house, are sold in large groups with thousands of loans in a group, or buckets. Think of it as a BIG bucket of thousands of loans in it worth 10’s or 100’s of millions of dollars. Your Bank’s bucket starts to get full so your Bank sells the mortgages off to investors so they can get them out of their bucket and into someone else's, so they can keep lending more money. Have you ever heard anything on TV about liquidity? This is what gives the banks liquidity so they can keep lending and keep their bucket from getting full. This helps keep rates low and the market more efficient. Cheaper interest rates for you and I! Now this is a very oversimplified explanation and maybe too OVERsimplified but it gives you the point! If you have any questions or comments please let me know. Read the full article about The Federal Housing Finance Agency (FHFA) Loan Limit increase on our blog.
With home prices are UP 6.9% on average in US -
Jan 07, 2019