Every year, the Federal Housing Finance Agency (FHFA) publishes conforming loan limits that include general and high-cost area loan limits; high-cost areas vary by geographic location.
A maximum loan limit is the total amount of money that an applicant is authorized to borrow. Maximum loan amounts are used for standard loans, credit cards, and line-of-credit accounts. The maximum amount depends on a number of things including credit, length, or purpose.
The maximum amount for an applicant is based on a number of prerequisites, which are determined by your mortgage lender, and is the maximum amount of money that is given if the loan is approved. Lenders will consider a borrower's debt-to-income ratio to help calculate how much the borrower would be able to repay which in turn provides a confident sense of what the maximum loan amount should be. To note, usually, applicants with a debt-to-income ratio of less than 35% are ideal.
If you have any questions or would like to learn more about loan amount limits in your area, please contact Tina Alexiou at The Mortgage Firm for more information!
