It’s official. Low mortgage rates may soon become a distant memory as the FED raised rates a quarter of a point this month. Since November, interest rates of 30-year conforming mortgages have shot up more than 50 basis points which has resulted in the highest mortgage rates in almost two years. This is obviously concerning if you’re in the market for a loan but overall it’s encouraging when one considers that the FED will only take these measures when they’re confident in the strength of the economy which, everybody benefits from. Keep in mind, the relationship between the rates and the state of the economy is in tandem so if things begin to tank, anticipate a rate decrease.
If you live in San Bernardino Country and are in the market for an FHA loan, things just got a whole lot better. As of January 1st, 2017, the loan limit for an FHA loan will go from $356,000 to $379,000, an increase of $20K. This is great news for homebuyers as this increase should provide that little bump needed, giving them the buying power to purchase their home. In Los Angeles Country, the conventional loan limit increased from $625,000 to $631,000 which shouldn’t have any palpable impact but when comparing these limits to those of San Bernardino County, we notice a significant difference in loan limit from $625K down to $417K. This drop in loan limit in San Bernardino County has made homeownership challenging for many as they’re faced with unappealing jumbo loans, higher interest rates and more money required for the down payment. Hopefully, these new limits for 2017 will have a positive impact on housing and provide that boost so many need towards homeownership.