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Rising real estate values power new interest in jumbo loans

2018 conforming loan limits jump by nearly $30,000 Property prices in many areas exceed so-called "conforming" loan limits -- the maximum mortgage amount allowed by Fannie Mae and Freddie Mac. The single-family limit is now $453,100 in most of the U.S. and as much as $679,650 in “high-cost” markets. How do you finance a home if the value is well above the conforming loan limits? Most mortgages today are QMs, and this is important for jumbo borrowers. Qualified jumbo mortgages: they're out there Under the rules, FHA, VA, and conforming loans are automatically Qualified Mortgages. With portfolio loans, lenders can originate jumbo QM mortgages, because there is no QM loan limit. Non-QM jumbo loans Not only can borrowers get jumbo QM loans; they can also get non-QM jumbo loans. For example, non-QM loans allow: Debt-to-income ratios higher than the 43 percent limit required for most QM mortgages Interest-only financing A 40-year term Millions of dollars Non-occupant co-borrowers Bank statement loan applications Alternatives for proving income Low credit scores Financing immediately after a foreclosure or bankruptcy Jumbo loans & taxes Under tax reform, the government has enacted new policies that will impact mortgage borrowers. The most important issues look like this: First, mortgage interest when you buy a home is deductible -- up to $750,000 for personal real estate. Jumbo mortgage rates The difference, or spread, between jumbo and conforming mortgage rates rises and falls, depending on markets.