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December 4, 2004 08:59 AM

Conforming Mortgage Loan Limits Rise For 2005


Excerpt: Borrowers can get larger loans in 2005 without having to pay higher rates for jumbo mortgages. Mortgage funding titans Fannie Mae and Freddie Mac have raised their 2005 conforming limit to $359,650, up from the 2004 limit of $333,700. It represents a 7.7 percent increase.


Borrowers can get larger loans in 2005 without having to pay higher rates for jumbo mortgages.

Mortgage funding titans Fannie Mae and Freddie Mac have raised their 2005 conforming limit to $359,650, up from the 2004 limit of $333,700. It represents a 7.7 percent increase.

Conforming loans are mortgages that conform to rules set by Fannie Mae and Freddie Mac, which keep mortgage money flowing to consumers by buying mortgages from lenders, bundling them and selling the resulting securities to investors.

The conforming limit is the rule that specifies the maximum loan amount for a loan that can be bought by Fannie Mae or Freddie Mac. A mortgage for greater than the conforming limit is a jumbo loan, and generally carries a rate that's a quarter- to a half-point higher.

The new conforming limit applies to loans sold on the secondary market in 2005, and doesn't necessarily apply to loans that are closed this year. Some lenders will adopt the new conforming limits immediately, and simply wait until January before selling them on the secondary market. This is an important point for people who want to get purchase or refinance mortgages between the old limit and the new limit this month.

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Read all 22 posts in the same category of Home and Mortgage:

A New Way to Hedge Your Home's Paper Profit - Dec 12, 2004
California, U.S. in a Housing 'Bubble,' UCLA Forecast Says - Dec 11, 2004
21st-Century Landlords - Dec 10, 2004
Get Real About Real Estate - Dec 09, 2004
Can There Be Too Many Homeowners? - Dec 06, 2004
Selling Your Home - Dec 06, 2004
12 Tips For Wise Use Of Equity - Dec 01, 2004
Housing Wealth Reverberates - Nov 30, 2004
More Mortgages To Be 'Conforming' - Nov 30, 2004
Realtors Engage In Turf Battle With Discounters - Nov 28, 2004
Expanding The American Dream Commitment - Nov 26, 2004
'Tis the Season to Fix Up Your House - Nov 26, 2004
Sell Your Home — Fast - Nov 26, 2004
Most Expensive Gated Communities In America 2004 - Nov 26, 2004
Exchanging Real Estate Tax Free - Nov 25, 2004
Home Equity For The Holidays? OK, With Caution. - Nov 25, 2004
Does It Pay To Save? - Nov 23, 2004
The High Earner/Poor Saver - Nov 20, 2004
Six-Figure Zip Codes - Nov 20, 2004
Buyer's Home Feature Preferences Reflect Lifestyles - Nov 16, 2004
Pattern of Strong Home-Price Gains Continues in Most Metro Areas - Nov 16, 2004