What’s the skinny on jumbo loans?

Let’s talk about conforming loans vs. jumbo loans in the mortgage world.

The Guidelines
Each year in October, the Federal Housing Finance Agency, or FHFA, collects data on the national median home value and compares that number to October of the previous year. If there is an increase, the conforming loan limit will increase by the same amount.

In October 2019, the year-over-year median home value increase was 5.38%. Therefore, the conforming loan limit for a single-family home in 2020 will rise to $510,400, up from $484,350. The loan limits on multi-unit properties will rise to $653,550, $789,950 and $981,700 for a duplex, triplex and fourplex, respectively.

Loan Differences
Loans amounts at or under these limits qualify as conforming loans. They “conform” to guidelines set forth by Fannie Mae and Freddie Mac. Conforming loans make up the majority of residential loans funded. Loan amounts that are above these limits are referred to as jumbo loans. With a conforming loan, lenders are able to sell the mortgage in the secondary market, replenishing their credit lines in order to make more loans. Jumbo loans have no such robust secondary market. When a lender approves a jumbo loan, it assumes the risk should the loan ever go into default.

Naturally, this makes it more difficult to qualify for a jumbo loan. The minimum credit score for most conforming loans ranges from 580 to 620. Jumbo minimums range from 720 to 740. Some jumbo loans can require a lower score, but the rates and terms are much more stringent.

Down payment requirements for jumbo loans are also much higher. A buyer can secure a conforming loan with a down payment of just 5% (or even 3% for special first-time programs) with the help of private mortgage insurance. Jumbo loans have no such insurance policies available and require a minimum down payment of 20% of the sale price of the home. Providing a down payment of 25% or more will make it easier to qualify.

Wondering if a jumbo loan is the right move? Reach out! I can help you find the right loan for your next move or investment.

Calling in the pros on HVAC repair

Safe furnace work

If you’re a homeowner, the internet can be a great source of
comfort when it comes to tackling do-it-yourself maintenance. Yes, Google can
show you the simple steps to replace a furnace filter, but most other HVAC
repairs are not of the DIY variety. Here’s what to watch out for and when to
call in the professionals:

Unusual Noises
Modern, efficient heating and cooling systems should run almost silently. When
you hear whistling, rattling, squealing, or knocking during operation, there’s
likely a problem. You can inspect the system yourself, but chances are you
don’t know much about the components inside your air conditioner or furnace.
Rather than putting the safety of you and your family at risk, it’s better to
let an expert HVAC repair contractor take care of it.

Nasty Odors
When an air conditioning unit or heating system is working correctly, you
shouldn’t be able to smell it. If there is an unpleasant odor emitted,
something is wrong. Your first step should be a filter replacement, but if the
smell persists you likely have mold growing, a damaged air duct, or a clogged
drainpipe. Each of these situations will require a thorough cleaning of the
unit and the eye of an expert tech.

Improper Airflow
Clogs, blockages, and leaks can all lead to decreased airflow in your heating
and cooling systems, causing them to run less efficiently and shortening their
lifespan. Qualified HVAC repair technicians have the experience to quickly
diagnose and address airflow issues.

Rising Energy Bills
Have you noticed that your energy bills keep going up every month? Unless
you’re experiencing a big swing in temperatures, increased energy usage means
your unit is having to work harder to maintain your desired temperature. By
keeping an eye on your utility bills, you can get a tech dispatched and get in
front of a total breakdown and the headaches that come when your unit isn’t
running at all.

A note on hiring the right HVAC company
As with hiring any new contractor, take time to do your due diligence on HVAC
service. Not all HVAC companies are the same, and you should never consider
only one resource when determining the right one for you. Check credentials,
licensing and insurance requirements in your region. Ask around for references
and read reviews online. Finally, ask them for an estimate. Many HVAC repair
companies will provide these at no cost. Get a quote from several different
businesses before choosing one.