Mortgages Are Easier to Get in 2016

published 4 March 2016

Changes to look for in 2016:

Higher loan limits. Home buyers in nine high-cost metro areas can borrow more before resorting to “jumbo” loans. For most of the country, the limit is still $417,000 for loans backed by Fannie Mae or Freddie Mac.

Outlook for Mortgages in 2016

Regulators raised the conforming-loan ceilings in Napa, Salinas, San Diego and Santa Rosa, Calif.; Denver and Boulder, Colo.; Boston, Nashville and Seattle. New limits range from $437,000 in Nashville to $625,500 in Napa.

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More qualifying assets. Freddie Mac allows borrowers to include the full value—up from 70%—of retirement-account assets to meet reserve requirements. Borrowers can also use vested stock options as a source of funds for reserves, down payments and closing costs.

First-time-buyer help. Buyers whose parents help them as co-borrowers don’t have to ante up a minimum of 5% of the down payment, as long as the total down payment is more than 20% of the purchase price. Co-borrowers can also contribute toward reserves, down payments and closing costs.

Home-Price Growth Set to Slow Down

Esswein joined Kiplinger in May 1984 as director of special publications and managing editor of Kiplinger Books. In 2004, she began covering real estate for Kiplinger's Personal Finance, writing about the housing market, buying and selling a home, getting a mortgage, and home improvement. Prior to joining Kiplinger, Esswein wrote and edited for Empire Sports, a monthly magazine covering sports and recreation in upstate New York. She holds a BA degree from Gustavus Adolphus College, in St. Peter, Minn., and an MA in magazine journalism from the S.I. Newhouse School at Syracuse University.