2020 Conforming Loan Limit Increase Takes Effect Immediately

The ARTICLE on 2020 Conforming Loan Limit Increase Takes Effect Immediately Was PUBLISHED On December 4th, 2019

2020 Conforming Loan Limit Increase Takes Effect Immediately at Gustan Cho Associates.

• By now you may have heard of the updated conforming loan limit thresholds for 2020
• Recently the Federal Housing Finance Agency (FHFA) released loan limits for the calendar year 2020, and they have increased from 2019 ($484,350) to 2020 ($510,400)
• In this blog, we will detail how you can take advantage of the updated loan limits before January 1, 2020, with Gustan Cho Associates

In this article, we will cover and discuss the 2020 Conforming Loan Limit Increase Takes Effect Immediately at Gustan Cho Associates.

No Need To Wait Until The Start Of New Year To Take Advantage Of 2020 Conforming Loan Limit Increase

Gustan Cho Associates are constantly expanding the loan programs we offer.

• We currently have the ability to lend with the increased loan amounts in all states we are licensed in
• While the new loan amount goes into effect for loan applications received after January 1, 2020, we are already able to land on the new loan amounts

We can also get these loans closed for you before the end of the year for you, assuming we start the process soon. 

Importance Of 2020 Conforming Loan Limit Increase

Why is the 2020 Conforming Loan Limit Increase Taking Effect Immediately Important:

• If you are using a conventional mortgage product, you must follow FANNIE MAE and FREDDIE MAC guidelines
• One of their guidelines will be a maximum loan amount
• For the calendar year 2019, it was $484,350 and has now been increased to $510,400
• For example, utilizing these new increased loan amounts can help you if you are buying a house for $537,000
• You can put down as little as a 5% down payment or $26,850 with our new program
• Where you would need to put down $52,650 with the 2019 loan limit ($537,000 – $484,350 = $52,650)

This can keep $25,800 in your pocket. That is a lot of money! 

Benefits Of Higher Loan Limit Increase

You may be in the process of a cash-out refinance and would like to take out more money.

• Or looking to purchase a home and having trouble qualifying for a jumbo mortgage
• There is a good possibility the extra loan amount can help you
• For example, your home is worth $638,000 and you owe $400,000
• You would like to complete a cash-out refinance to buy a vacation rental
• With the current 2019 loan limits, you can only raise your loan amount to $484,350
• So the total cash out would be $84,350 (minus closing costs)
• When you use our new loan program, you can raise the loan amount to $510,400
• Your cash out is now $110,400 (minus closing costs)
• Still falling in the 80% loan to value cap for all conventional cash-out refinance transactions

For more information on cash-out refinances, please visit our CONVENTIONAL CASH OUT GUIDELINES blog. 

Starting The Mortgage Process With Higher Loan Limit Before The Official Start Date

Where are most lenders need to wait until January 1, 2020, to start an application with the new loan amounts, we are able to start the process today:  

What requirements are necessary to utilize new loan amounts today?

• 620 credit score
• 5% down payment (3% for first time home buyers)
• Debt to Income up to 49.99% (under 43% preferred)
• Mortgage insurance is required for the down payment of less than 20%

Taking Advantage Of 2020 Conforming Loan Limit Increase Prior To New Year

How to start the process?

To apply for a mortgage with the updated loan amount, simply call Mike Gracz on 630-659-7644 or send an email to mgracz@gustancho.com. Either Mike Gracz or one of the highly skilled loan officers from Gustan Cho Associates will assist you. You’ll be sent an application link and asked to send in the following documentation:

• Last 60 Days Bank Statements – to source down payment
• Driver’s License
• Last 30 Days Pay Stubs
• Last Two Years W2’S
• Last Two Years Tax Returns – if other income besides W2 is reported

Getting Qualified For A High Loan Limit Conventional Loan

You will then complete the pre-approval process and begin shopping for a property. If you are trying to completely refinance transaction, please send the following documentation: 

• Driver’s License
• Last 30 Days of Pay Stubs
• Last Two Years Tax Returns – if other income besides W2 is reported
• Last Two Years W2 
• Current Mortgage Statement
• Homeowners Insurance Policy

Qualifying For A Mortgage With A Lender With No Overlays

At Gustan Cho Associates, we offer a wide range of mortgage products. We do not have any LENDER OVERLAYS on FHA, VA, or Conventional mortgage loans. Over 75% of our clients have been turned down by their current lender or are not getting the customer service they deserve. Mortgage lending can be confusing, we have seen many one-off situations and are able to help more clients than most banks. If for some reason you do not qualify today, we will set up a customized financial plan to have you qualified as soon as possible. We are available 7 days a week for any mortgage advice. Please give us a phone call today.