Can you think of many (any?) things that will cost LESS in 2021?

Among the items on this shortlist is the cost of mortgage money. While we can’t predict the direction of mortgage rates in 2021, we can tell you that the Limits (caps) on lower costing mortgages are set to expand on January 1, 2021. 

The baseline Conforming Limit will be set to $548,250 for single-family* and condos (up from $510,400 in 2020). This healthy 7.42% increase comes at a time when it is well needed and deserved. This increase helps both Home Buyers and Refinance Borrowers. 

Having trouble understanding how this could benefit you? Consider you are filling a shopping bag with more money at a lower rate. The shopping bag above $548,250 has also been expanded. This next tier of mortgage money (by county) increases to $724,500. This tier is known as the Agency High Balance, Super Conforming, or Agency Jumbo. 

All the Eastern Massachusetts counties are in this higher tier (Suffolk, Plymouth, Norfolk, Middlesex, and Essex). The limit hops over the Cape (Barnstable stays at $548,250) but includes the Islands of Nantucket and Martha’s Vineyard (Dukes and Nantucket County receive a super-premium of $822,375). For more complete limits check out our 2021 Jumbo Mortgage post.

This limit, now parked just shy of three-quarters of a million allows a buyer to finance 95% of the purchase (5% down) and receive Qualified Mortgage terms (AKA great rates, fixed terms, efficient cost structure, and a predictable PMI expense).

The benefits of staying inside of the Agency umbrella are numerous. The noticeable aspects will be the lower rate and also an easier underwriting process with street corner availability to providers (as opposed to hunting for a lender that will take on the larger risk).

Stay safe and healthy everyone!

Very gratefully yours,

The Team at GoldCoast Mortgage

*If you are interested in learning about the effect of the increased loan amounts on 2, 3, and 4-unit properties please contact us.