Getting your first mortgage or home loan can be both exciting and confusing, especially if you’re doing it for the first time. If you want to get the most out of your home purchase, it’s important to understand how lenders work with conventional mortgages and what the maximum conventional loan amount limit means in practical terms. If you can figure out how much house you can afford and what type of loan is right for you, you may find that you can buy more houses than you had originally thought was possible! To learn more about this topic, keep reading!
The maximum conventional loan amount limit
For those looking to get a conventional mortgage, your loan amount cannot exceed $484,350. This is the conforming loan limit that applies to nearly 90% of U.S. counties and has been increased each year since 2008 due to rising home prices. If you’re looking to purchase a more expensive home, you’ll need a jumbo loan that exceeds the conforming loan limit in your county. The maximum loan amount for these loans is typically around $1 million. However, many factors can affect how much you’re able to borrow including credit score, debt-to-income ratio, down payment percentage, property type, and location. So be sure to speak with a professional before signing on the dotted line!
Factors that affect your maximum loan amount
The maximum loan amount for a conventional mortgage depends on several factors, including your credit score, the type of property you’re buying, and whether you’re buying a single-family home, a duplex, or a triplex. In general, the higher your credit score, the more expensive a property you can buy. If you want to purchase a single-family home, then your limit is typical $484,350. If you are purchasing two units (a duplex), then the limit is typically $636,150; three units (a triplex), $769,950; four units (a quadplex), $910,700; five units (a penthouse) – $1 million; six units (simplex) -$1.2 million. If you have little or no equity in your current home, don’t expect to borrow as much as someone who has paid off their existing mortgage.
How much can you afford?
When it comes to choosing a mortgage, one of the first things you’ll need to decide is how much you can afford to borrow. This will be based on several factors, including your income, debts, and the type of loan you’re interested in. To find out what your maximum conventional loan amount limit might be, we recommend using an online calculator like this one from the Federal Reserve Bank of Boston. Simply enter some basic information (your income, current debt obligations, and monthly housing expenses) and hit calculate. You’ll get back a summary of the different types of loans available to you along with a recommended loan that matches your needs as closely as possible.
Don’t let this be an obstacle to buying your home
A conventional loan is a mortgage that is not backed by a government entity, such as the Federal Housing Administration (FHA) or Veterans Administration (VA). A conventional loan may have a higher interest rate than other types of loans, but it also has more flexible credit and income requirements. The maximum amount for a conventional loan depends on the loan limit set by Fannie Mae and Freddie Mac, which are government-sponsored enterprises that purchase mortgages from lenders. You can’t exceed these limits. Your total monthly housing expense cannot exceed 31% of your gross monthly income, including utilities. Plus you need to show three months of continuous employment and have a good credit score to qualify for this type of loan.
Ask yourself before you start building your home, Is this really what I want?
There’s a lot to think about when you’re planning on building a home. The first thing you need to do is ask yourself if this is really what you want. Building a home is a huge investment, and it’s not something that you should take lightly. You need to be sure that you’re ready for the commitment before you start construction. One of the biggest questions you’ll have to answer is how much money you’ll need. The maximum conventional loan amount limit is $484,350 as of January 1st, 2019. If your purchase price falls outside of this range then there are other options available such as a VA or FHA loan. It’s important to plan so that your loan will cover all of your expenses including mortgage payments, taxes, insurance, and closing costs.