Jumbo Loan Limits To Fall October 1

On October 1, 2011 the maximum amount for conforming jumbo loans which can be sold on the secondary market to Fannie Mae and Freddie Mac will drop from $729,750 to $625,000. In most parts of the US the conforming limit is, and will remain $417,000, but in counties with higher property values the limit has ranged as high as $729,750, and will now be limited to $625,000. Homeowners seeking to borrow more than the conforming loan limit will be required to apply for jumbo loans which generally means a higher interest rate and larger down payment (or more equity in the case of a jumbo refinance.)

How far the conforming loan limit falls will vary from one county to another based on property values in that area, with the maximum being $625,000 in the most expensive housing markets.

Homeowners whose mortgage amounts are below the current jumbo loan limit but may fall above the new limits should consider whether they would benefit from a refinance. Talk to a mortgage professional to see whether you could lower your note rate, lower your monthly payment, or go from an adjustable rate mortgage to a fixed rate mortgage while you are still able to qualify for a conforming loan.