Maximum conforming loan limits could rise by up to $12,000 come November, Mat Ishbia predicts.

In November 2015, despite predictions to the contrary, the FHFA announced that conforming loan limits would remain unchanged in much of the US. As November 2016 approaches, United Wholesale Mortgage CEO Mat Ishbia predicts that limits will rise this time around, given that the expanded-data HPI (House Price Index) has now reached pre-crisis levels.

Under the Housing and Economic Recovery Act of 2008, the baseline loan limit cannot rise above $417,000 unless home prices return to pre-crisis levels, which they have as of the second quarter of 2016. Ishbia predicts that rates could rise as high as $12,000, which, while not “a lot” in his estimation, is still a positive sign for the industry.

“Raising conforming loan limits is a great thing for borrowers because they can get about a quarter-percent better rate with these changes. Loan officers throughout the country will be able to fit more people into conforming loan limits rather than high-balance or jumbo loans, which will allow more borrowers to qualify and make it easier for people to purchase or refinance homes,” Ishbia said.

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