Jumbo loans - the federally insured mortgages that allow homebuyers to secure lower interest rates and thereby increase the size of the loan they qualify for - will see a big change on Oct. 1.
That's when the jumbo loan limits will drop nationwide. The amount of decline depends on the homes prices in each county.
For Los Angeles County, the limit will fall from $729,750 to $625,500.
That affects home loans through the Federal Housing Administration that require a 3.5 percent down payment, as well as mortgages through Fannie Mae and Freddie Mac that demand 20 percent down.
But don't look for a mob of homebuyers rushing to close their loans before then. That is at least partly because few consumers know about the change.
Think that high loan limits are just a thing for a few high cost areas? Think again. NAR's research found that more than 669 counties in 42 states and the territories would be negatively impacted by the loan limit change. The average decline in loan limits would be more than $68,000. Only 8 states will see no decline (AR, IA, KS, MS, NE, ND, SD, & OK). Every other state will see a drop in loan limits.
