Is there a loan officer you're looking to apply with?

Please create an account to get started!

Please choose your loan advisor:

7 ways to save when building a house

When it comes to building, the general rule for keeping it affordable is to keep it as simple as possible. A simple crackerbox-style house on a flat lot in a subdivision with utilities is going to be much more affordable than a Victorian house in the woods built into a steep hill.

1. Work with your lender to find your budget

Before you even start looking at house plans, contact a trusted local home lender that offers construction loans to see what you qualify for and what your best option is. A good lender will take time to get to know you, your financial goals, and help you come up with a financial plan to build a new home you can afford for many years to come.

2. Find a simple home plan

Houses with a small square footage but complex design will cost more to build than you expect. When selecting a house plan, look at the footprint and roof. The structures with the most basic footprint (think of a house that’s just four exterior walls) and simple roofline (a roof that looks like an inverted V without any dormers) is the most economical to build. When it comes to the interior space, consider where plumbing is located. Plans with bathrooms, kitchens, and laundry rooms clustered together are more economical to build.

3. Build up, not down or out

Foundations and roofs are expensive. To keep your build more affordable, limit both. If you need more space, pick a simple two-story house with a small footprint over a single-story ranch.

4. Find a flat lot

Building on sloped land brings a lot more challenges than flat ground. If your building site is already sloped, your builder will have to level it out. They can cut into the ground to make it flat, they can bring in soil to fill in the plot and make it level, or they can build the home on supporting wood or steel columns. All of these options add additional costs you wouldn’t have if you built on a flat lot. You’ll also find that drainage and sewage will be more difficult and more costly when you’re building on a hill.

5. Find a lot with utilities

Bringing in utilities is expensive. In order to begin your construction project, your builder will need a power source. If, as example, you purchase a lot that doesn’t have electricity going to the build site, be sure to understand the cost of bringing it in. Most power companies will install service lines for free – so, perhaps from the road to a build site that’s 100 feet away. But if your build site is down a half mile driveway, you will likely have to pay for the wiring to bring electricity to your site. The cost can range between $25 to $50 per foot. For a half mile, that could be between $66,000 to $132,000. If your site doesn’t already have water, you’ll have to put in your own well.

6. Contact builders to get an estimate for the plan you want to build

If you have a basic house plan and an idea of where you’d like to build, most home builders will be willing to give you a rough estimate of the cost per square foot. As you call around, you’ll find that some builders specialize in luxury homes while others focus on homes that are more budget-friendly. Eventually, you’ll find one that fits your budget and home style. Be sure to find out how busy they are and when they’d be able to start the build. These are both important factors to consider – especially if you’ll be renting an apartment during the build.

7. Affordable finishes

At some point during your build, you’ll have to start making choices about what kind of finishes you’d like. Consider linoleum or carpet instead of wood flooring. Or laminate countertops in place of granite. Consider basic rods instead of closet cabinetry. These finishes can always be upgraded in a few years if you decide you really want them.

What’s a barndominium?

A Barndominium a trendy new type of home that’s gaining popularity. They’re usually defined as an energy-efficient low maintenance metal building you can live in. Think of a warehouse or metal barn with the inside transformed into living quarters. That’s a barndominium. Sometimes they have an attached shop, horse stable, or garage. Sometimes not. The exterior gives homeowners a sleek farmhouse look while the interior can be any style possible.

People love the barndominium because they offer a lot of advantages over traditional stick-built homes:

  • Cheaper and quicker to build
  • Open concept floor plans
  • Energy-efficient metal roof
  • Low-maintenance metal exterior
  • High vaulted ceilings
  • Option for an attached shop

How much does a barndominium cost?
Like anything real-estate related, costs vary based on location and material costs. However, for a rough comparison, a standard house is between $100 to $200 a square foot and luxury and custom homes ran closer to $200 to $500 a square foot to build in the United States in 2020.

Barndominiums “shells” – the exterior walls and roof – are significantly less expensive than those of stick-built houses. Often they’re available as kits which are constructed upon a rectangular concrete slab. Costs range from $70 to $95 a square foot for a more DIY builds and more for ones built by a licensed builder.

How to finance construction for one
There are two ways to build a barndominium – and whether you’ll get financing depends on how you build it.

Option one is to hire a builder to assemble and complete your barndominium. To finance this, you’ll need a short-term construction loan financed through most home loan lenders. Once your home is built (or if you buy an already built one) you’ll need to apply for a traditional mortgage.

Option two is to built it yourself. Most home lenders won’t finance DIY construction. However, some companies that manufacture barndominium shells will offer their own financing. These shells contain the frame, exterior doors, windows, and roof. Beyond that, you will have to finance the additional items needed to complete your home such as electricity, plumbing, walls, flooring, insulation, etc.

Regardless of how you finance your build, be sure to check your land’s zoning and covenant requirements. It’s fairly common for subdivisions to have restrictions on sheds, garages, or other metal structures (which might include your barndominium). And make sure your barndominium will fit on your lot too. Barndominiums are typically larger than other structures, so you’ll want to double-check your home won’t be larger than allowed and will fit on the land you selected.

Do barndominiums hold their value?
So far, those that have sold recently seem to keep their value. They’re growing more popular across the U.S., and you can even find them listed under their own filter on Zillow. Beware, though, that one of the things that makes them appealing is their distinctive design. But it also may make them harder to sell since they’re too unconventional.

When you’re ready to crunch the numbers to see whether a barndominium would be a better option than a stick-built home, contact your local Man Mortgage home lender. They can help you decide whether you’d qualify for a construction loan or if it might be a wiser choice to get a stick-built home.

What Is Mortgage Insurance?

Mortgage insurance is an insurance policy that benefits the lender in the case a borrower defaults, dies, or is otherwise unable to meet the obligations of their loan. If that should happen, the insurance company would pay the lender a portion of the principal balance of the loan. The insurance policy is paid for by the borrower and they are still required to pay back their loan if they should default. The biggest benefit of mortgage insurance for a borrower is it allows the lender to extend credit to those they otherwise would not due to the size of the borrower’s down payment.

Where Do Mortgage Insurance Payments Go?
Your monthly payments are sent to an insurer that will pay a portion of your remaining loan balance to your lender in the event you default on your home loan.

If You Default, Does Mortgage Insurance Pay Off Your Loan Balance For You?
No. If you fail to pay back your home loan according to your initial arrangements, most lenders will allow a grace period of around 120 days to help you catch up. After that period, because you failed to pay back your mortgage loan, your lender has the right to sell your home to recoup the debt. This is called foreclosure. Your lender will keep the proceeds from the home sale as well as a payout from PMI. If there is still a remaining balance on your loan, you will be responsible for repaying it.

Many home loans have mortgage insurance, but it works a little differently for each one.

PMI For Conventional Home Loans
Conventional home loans are offered to anyone so long as they, and the real estate they are securing a loan for, meet the minimum requirements of the lender. Down payment can be as low as 3%. Your lender will likely require you to pay private mortgage insurance (PMI) for down payments of less than 20%. PMI can be cancelled once you reach 20% equity in your home and the lender will cancel it automatically once you have 22% equity.

Calculate your PMI payments.

MIP for FHA Home Loans
Federal Housing Administration (FHA) loans feature down payments as low as 3.5% and easier credit qualifications than conventional home loans. Regardless of your down payment amount, if you have an FHA loan you will have to pay both an upfront and annual MIP. The upfront premium is 1.75% of your loan amount, and the annual premium is between 0.45% to 1.05% of the average balance of your loan per year.

Annual MIP payments will be made in monthly installments for the life of the loan if you put down less than 10%. If you put down more than 10% you will pay it for 11 years.

USDA Mortgage Insurance
Loans from the United States Department of Agriculture (USDA) are available with 0% down payment to purchase a home in an area defined as rural. For these loans, you will have to pay two fees: an upfront guarantee fee you pay once and an annual fee you will pay every year for the life of the loan. The upfront guarantee fee for 2021 loans is 1% of the loan amount and you pay it when your loan closes. The annual fee is 0.35% of the average loan balance for the year and is divided into monthly installments and added to your mortgage payment.

No Mortgage Insurance for VA Home Loans
The United States Department of Veterans Affairs (VA) home loans are a type of mortgage available to assist active service members, veterans, and surviving spouses in buying, building, and retaining a home. A VA loan allows qualified borrowers to purchase a home with 0% down payment and without mortgage insurance.

Mortgage insurance can be expensive, but don’t let it keep you from getting into a new home. Work with your Mann Mortgage lender to find what your mortgage insurance payments would be or whether you can qualify for a loan that doesn’t require it. Together, you can decide on the right path forward to get you into a new home.

What happens when a home lender checks your credit?

One of the first steps in applying for a loan is having a home loan lender check your credit to see what you’d qualify for. What does that mean and what impact will it have on your credit score?

Your lender will see your credit report
You begin building your credit history with your first credit card or loan. The history of how you handle your credit builds your credit report. Your home lender will request a copy of your credit report from one of the three major credit reporting bureaus – Equifax, Experian, or TransUnion. Their report includes the following about your credit:

Personal identifiable information – As example, your social security number, date of birth, name, and employment information. This is used to verify your identity.

Credit accounts – A list of any credit accounts you have. This includes credit cards, auto loans, mortgages, student loans, etc. Your report shows the date you took out credit, the credit limit or loan amount, your payment history, the account balance, and whether you’ve made payments on time.

If any of your accounts went into collection (even if they weren’t credit accounts), there will be a record of it on your report for seven years. Paying off the debt will not remove the record from your report faster.

Credit inquiries – A list of times when companies have pulled your credit history. Only those made in the past two years remain on your report and only those done within the last year impact your credit score.

Public records – A list of instances of bankruptcy. Chapter 7 bankruptcy remains on your report for ten years and Chapter 13 will remain for seven.

Your credit will take a small hit
When your home lender requests a copy of your credit report from a credit bureau, it indicates to the credit bureau you’re looking to take on additional debt. It results in a small negative impact on your score – usually five points or less. It’s an unavoidable part of getting a home loan and your score will bounce back again in a few months.

Don’t let this small hit on your credit keep you from contacting other lenders to find a better rate or home loan term. Within a 30-day window, you can have other home lenders pull your credit report without it impacting your score again. Credit bureaus know it’s a good idea for consumers to shop around to find the best rate, so they won’t penalize you for it.

You’ll get unsolicited credit offers
It’s common to start receiving phone calls or letters from other lenders after your credit report is pulled. How did these other lenders know you were looking for a loan and why are they contacting you?

When your home lender requests a copy of your credit report, it alerts the credit bureau that you’re looking for a loan and they turn this knowledge into a commodity. Within 24 hours, the credit bureau will sell information about you and the loan you’re applying for to lending agencies. They can provide your name, address, credit score, and type of loan you applied for.

Some lenders will buy your information (called a trigger lead) from the credit bureau if, based on your data, they would like to do business with you. They will call, email, or mail you their own mortgage offer which may be better than the one your lender is giving you. In theory, the more offers you get, the more likely it is that you’ll get a good deal. That’s why selling and buying trigger leads is legal in all 50 states.

Mann Mortgage has made the decision not to purchase trigger leads for our competitors’ customers. We feel it’s an invasion of privacy that can expose people to identify theft. If you are currently working with Mann Mortgage and have any questions about the offers you receive or who an offer came from, please contact your Mann Mortgage lender right away. They will be able to help you.

Remember – your credit score is only part of your loan application
Your credit score and history are important components of your home lender’s decision on whether to extend credit to you. They’ll also consider the length of your credit, your down payment, your debt-to-income ratio, your total assets, and your current income. Your lender will take a holistic view of your financial situation to determine whether they’ll extend credit to you.

>> Once a year, you can check your own credit score for free and without negatively impacting it at Annual Credit

When you’re ready to get a home loan, contact your local Mann Mortgage home loan experts. In addition to going over your credit and loan eligibility, they’ll get to know you and answer any questions you have about financing the right home for your needs.

Tips for first-time home buyers

Whether it’s your first time buying a home or it’s been a few years since you last bought one, knowing where to start is your first step towards finding a home that fits your needs.

Save for a down payment
The amount of money you’ll need for a down payment depends on the type of loan you choose and the price of your home. Some conventional loans are specifically aimed at first-time home buyers with good credit and a 3% down payment and others are available to borrowers with 0% down.

Talk to a local home loan expert
There are a lot of options for financing your new house. Before you get too excited about a new home, you’ll want advice from a pro. Find a local home lender with great reviews and a solid reputation and set up a meeting with one of their loan officers. They’re experts in finding the right loan for their clients’ needs. You’re under no obligation to work with any lender you speak with and your meeting time is free. The information they’ll provide to you will let you know what type of loan you’re eligible for, first-time home buyer assistance programs for your state you could take advantage of, the approximate interest rate you would pay, and the price range for a house you would be able to afford.

>> Mann Mortgage has a rating of 4.89/5 stars with more than 15,000 reviews on SocialSurvey.

Get a pre-approval letter
When you’re ready to start home shopping, ask your home lender to pre-approve you for a loan. They’ll pull your credit score and history, verify your income, check your assets, calculate your debts, and approve you for the appropriate home loan. Your lender will give you a blanket letter stating you’re approved for a loan up to a certain amount of money or they will write you a personal letter for the home you are putting in an offer for. Either way, the pre-approval letter lets the home seller know you are a serious bidder already working with a lender, so your financing should go through without a problem.

>> What happens when a lender pulls your credit?

Choose the right real estate agent
Find someone with intimate knowledge of the community you’re purchasing in. They should be able to answer questions about the housing inventory, schools, traffic, and much more. Ask for a referral from your home lender, friends, co-workers, and neighbors. You can even drive or walk around the neighborhood you’d like to buy in to find agents selling in the area.

You’ll know you’ve found the right agent when they answer questions quickly, work as a Realtor fulltime, close on deals, and are willing to educate you about the local market and homes you’re interested in.

Know what kind of market you’re purchasing in
When you find the home with the right size, location, age, and price range, the way you make your offer may depend on the type of market you’re in. Generally speaking, there are two markets: a buyers’ market and a sellers’ market.

If you’re in a buyers’ market: A buyers’ market means there are more homes available than people to buy them. This is great news for a buyer. You’ll have plenty of homes to choose from and you’ll have time to weigh the pros and cons each before you put in an offer. Offers with contingencies such as financing, home sale, or inspection will have a much higher chance of being accepted than they would in a sellers’ market.

If you’re in a sellers’ market: A sellers’ market means there are less homes available than people to buy them. Be prepared to act very fast when you see a house that meets your needs as it’s possible a home seller will receive multiple offers within days of the house being listed. Be prepared to make multiple offers on homes before one is finally accepted. It’s going to be tough to get a house and you’ll be competing with other very serious buyers (some people make offers in cash -meaning they don’t have to finance the house, they have the money to buy it outright). Talk with your Realtor about what you can do to make your offer more likely to be accepted. Some common tactics are:

  • Have a home loan pre-approval letter.
  • Don’t plan on negotiating – make your first offer strong.
  • Waive as many contingencies as possible.
  • Write a personal letter to the seller when you make an offer.
  • Put an escalation clause on your offer. This means you make an initial offer but also set a maximum offer. If the seller receives another offer that’s higher than your initial offer, your offer will increase by a set amount to beat the other offer up to your maximum price.

Get ready for closing
If your offer got accepted and all the contingencies were removed, you should be ready to close. Closing is the final step in transferring ownership from the seller to you. Your home lender will originate and underwrite your loan and the title company will prepare a lot of paperwork for you to sign.

>> What to expect when closing on your new home.

When you’re ready to talk to a professional loan officer, contact your local Mann Mortgage office. Our loan officers are very familiar with helping first time home buyers understand their loan options, the local housing market, and how to finance the right home.

The difference between a 30 and 15-year fixed mortgage

A mortgage term is how long it will take you to repay the loan in full. There are a few term options, but most common are 15 or 30-year terms.

Both mortgage options are fixed rate meaning the interest rate and monthly payment is set when the loan is taken. A fixed-rate makes it much easier for a borrower to budget since they know exactly how much the minimum payment is each month for years to come.  No matter what happens with interest-rates, the minimum payment won’t change.

30-year mortgages are by far the most popular mortgage product for American homebuyers – Freddie Mac says 90% of all loans are 30-year fixed. What makes them so appealing? Are there any benefits to a 15-year fixed?

30-year mortgage
Because the term of the loan is longer, there is a higher chance the borrower will default over time, so it’s a riskier option for lenders. But the payoff for borrowers is big – substantially lower monthly payments than a 15-year mortgage.

A lower monthly payment makes homeownership a possibility for more Americans and it may allow some people to purchase more home than they’d be able to with a 15-year fixed. Even borrowers who could afford to make larger payments may choose a 30-year fixed and re-invested or put away the money they’re saving to further their financial stability.

The catch? You’ll save money each month, but you’ll be paying your mortgage for longer. And, in the end, you’ll end up paying much more in interest than you would with a 15-year loan for the same house.

15-year mortgage
Lower monthly payments sound great, so why would anyone get a shorter loan term? Borrowers often choose a 15-year loan because they pay off the loan much faster and with less interest overall. Take the example below.

$275,000 Mortgage
 APRMonthly paymentTotal interest paid
15-year fixed2.529%$1,837$55,737
30-year fixed2.948%$1,152$139,617

The monthly payments are nearly $700 more per month, but over the course of the loan, the borrower saved $83,880. If you can afford a bigger payment, looking into a 15-year fixed mortgage may be a good idea.

Because there’s less time for the loan to be exposed to risk, interest rates for 15-year mortgages are usually lower than that of 30-year fixed. The rate can be around a quarter to a whole percentage point less.

How about something in-between?
If you like the lower payments of the 30-year mortgage but the faster payoff of the 15-year mortgage, consider getting something in between like a 20-year mortgage. There are a lot of different options when it comes to home loans. It’s best to speak with a local loan expert to see what would work best for you and what your payments would be like with each option. Together, you can find the best path forward for your financial goals.

Renovation and construction loans shine in a sellers’ market

All across the country, home buyers are struggling to purchase a new house. When we see what’s happening in the market, it’s easy to see why:

Average changes in February 2020 vs February 2021
Inventory is down – 48.6% fewer homes on the market
Homes are selling faster – 12 days less on the market
Home prices are increasing – 13.7% more expensive

It’s a sellers’ market almost everywhere. Some metro areas are even more competitive than others. Oklahoman City, Oklahoma has seen a 56.7% decline in active listings while prices increased 16.8%. Kansas City (both in Missouri and Kansas) shows a 57% decrease in active listings and a 16.3% medial listing price – plus new listings are on the market 21 fewer days than they were in 2020.

Consider this as well – Many homeowners took advantage of low interest rates to refinance their homes in 2020. If rates continue to increase, will inventory remain low? Will homeowners want to sell a home they negotiated such a low interest rate for?

Don’t give up hope on getting a new home
It’s hard, but not impossible to get an offer accepted on a home. Work with your local home lender to make sure you’re able to put in an offer that’s fair, competitive, and in your budget.

And if that doesn’t work?

Then it’s time to look into a building or renovating a home!

Construction loans
They’re short-term (usually 12 to 18 months) loan used for the materials and labor needed to construct a home. Sometimes, the funds are also used to purchase the lot the house will be built upon. The interest rate for a construction loan is typically around 1% higher than mortgage rates, but they are variable. So, the rate may change throughout the loan term.

To make the loan even easier, you can select a one-time close. That means you’ll get approved to finance both construction and mortgage for your new home at the same time. After construction is complete, your loan automatically becomes a traditional mortgage. There is one loan and one closing.

Smaller lenders, like Mann Mortgage, can offer construction loans with much lower down payments than big banks.

>> Answers to the most common construction loan questions

Renovation loans
Renovation loans can be used two ways: to buy and fix a new home or to refinance and update your current one.

Savvy buyers will use a renovation loan to purchase an ugly house that’s lingering on the market, then use the additional funds to renovate it to make it what they want.

Shopping in a sellers’ market is stressful. Rather than burning yourself out searching for a home, use a renovation loan to update the home you’ve already got. Renovation loans can fund remodels, surface updates, and additions to your current home. It’s a great way to get an updated home without having the pressure of competing with other buyers.

>> Which renovation loan is right for you?

Now is a great time for a renovation loan

If you’re looking to purchase a new home but are struggling to find one you can afford, you’re not alone. Across the country, inventory is low and bidding wars are the norm. In the hottest markets (Austin, Phoenix, Nashville), homes are listed for a week or less before they have more than a dozen offers all for more than asking price. Getting your offer accepted is like winning the housing lottery.

Rather than giving up on your dream to get a new house, try switching tactics instead. There’s a mortgage trick savvy home buyers have used for years to get a beautiful home: renovation loans. Think of it this way… We’re all seen dated and odd houses sit on the market while turn-key houses fly off the shelves. Why not purchasing that ugly house and remodel it into a home that works for you?

Home renovation loans work a little like a conventional mortgage, except the cost of renovating the home is tacked onto the loan. So rather than taking out a loan for the purchase price, you take out a loan for the purchase price plus the renovation budget.

How much might extra might a renovation cost? These top renovation projects give you a quick idea of what homeowners paid in 2020, according to HomeAdvisor:

  1. Home addition ($52,157)
  2. Inground pool ($49,245)
  3. Kitchen remodel ($35,317)
  4. New exterior siding ($13,974)
  5. Bathroom remodel ($13,401)
  6. New roof ($9,375)
  7. New windows ($9,131)
  8. New cabinets/countertops ($5,832)
  9. New flooring ($4,680)
  10. Decking and porches ($3,291)

Homeowners looking to finance a remodel have two options: FHA 203K loan or Fannie Mae’s HomeStyle Renovation loan. Each is a great option, so let’s break them down.

FHA’s 203K remodel loan
This is a great option for families in low-to moderate-income brackets It’s a loan provided by FHA (Federal Housing Administration). It provides a minimum of $5,000 for renovations and major structural repairs. The kicker is you have to hire a HUD consultant to oversee the project and the money can only be used for:

  • Structural alterations and reconstruction
  • modernization and improvements to the home’s function
  • Elimination of health and safety standards
  • Changes that improve appearance and eliminate obsolescence
  • Reconditioning or replacing plumbing
  • Installing a well and/or septic system
  • Adding or replacing roofing, gutters, and downspouts
  • Adding and replacing floors and/or floor treatments
  • Major landscape work and site improvements
  • Enhancing accessibility for a disabled person
  • Making energy conservation improvements

Even with those restrictions, it’s a great loan if you’re eligible. Qualifications for getting the 203k Renovation Loan is similar to getting a FHA loan.

Fannie Mae’s HomeStyle Renovation loan
These renovation loans are available through Fannie Mae and don’t have restrictions like the 203k FHA loan. You can use the funds for virtually anything you want. Add a tennis court, an inground pool, an over-the-top fountain – and you can do it to both your primary residence as well as a secondary vacation or investor home. The improvement has just two requirements in order to be eligible:

  • It must be permanently affixed to the property
  • It must add value to the property

This loan has a lot of possibilities for new purchasers, investors, and secondary home buyers. It’s an opportunity to purchase and renovate a home to gain quick equity.

Refinance and renovate the home you’re in
If you can’t purchase the home you want, consider refinancing with a renovation loan and make your current home the one you want. Renovation loans are available for the initial purchase of the property or when refinancing. Doing it now while rates are low may be a smart move for some homeowners.

If you’re open to getting a fixer-upper home and renovate it, reach out to your local Mann Mortgage lender. Together, you can talk about the market in your area, what you’d qualify for, and they can even recommend a builder to work with.

Financial benefits of owning a home

Buying a home has long been considered part of the American dream. But when you consider a home as a financial investment, is it a good choice? Below is a review of some big financial benefits of homeownership.

Build equity
Equity is the value of the property you actually own. As example, if your home is valued at $300,000 and you owe $200,000 on it, you have $100,000 in equity.

Unlike rent payments, each time you pay your monthly mortgage you gain a little more equity in your home. As you continue to pay off your loan, more money will go towards the principal every time – bringing you closer to owning more of you home. Eventually, all payments will have been made and the loan satisfied, you will no longer have a mortgage payment at all.

Get tax deductions
If you’re itemizing your tax deductions, there are a few tax breaks you get as a homeowner including writing off interest payments, real estate taxes, and energy-efficient improvements. When you sell your home, you may be able to avoid some of the capital gains tax on the profit you’ve made as long as you meet certain requirements (like having lived in the house as a primary residence for at least two of the previous five years you owned it).

Price appreciation
Houses (and the land they’re built upon) generally increase in value every year. The last quarter of 2020 saw home prices increase in value by an average of 4.29% according to S&P/Case-Shiller. So as you’re paying off your home, it will hopefully be increasing in value on its own. Just be aware that homes aren’t guaranteed to increase in value, and you’ll be able to take advantage of the appreciation only after owning it for many years.

A fixed monthly bill
A huge benefit of homeownership is that you’re better protected from inflation. If you have a fixed-rate mortgage, the amount you pay each month for your home won’t change no matter what happens to the interest rate and the economy. Even adjustable-rate mortgages have an interest rate cap to protect the homeowner. As rent continues to increase, having a steady mortgage payment that won’t increase will offer peace of mind when you’re budgeting.

Get better credit
Having a long history of making payments towards a big debt does wonders for your credit. Since mortgages typically last 15 to 30, if you make your payments on time, you can expect it to positively impact your score. Regular on-time rent payments can also positively impact your credit, but not automatically. Your rent payments must be reported to select credit agencies using a rent-reporting service.

Is a home purchase a good investment for you? You’ll need to crunch the numbers to decide. Take stock of your own financial standing and the average price of a house in your area compared to the price to rent a home. When it comes to purchasing a home, it’s always best to talk with a local home loan expert. They will tell you what loans you’ll qualify for, the minimum down payment, and provide info on the market you’re looking to buy in. Together you can review your financial goals to see whether owning a house would positively or negatively impact your future.

Conforming loan limits for 2021

When applying for a mortgage, one of the most popular options is a conforming loan. These loans are called “conforming” because they conform to the guidelines set by Fannie Mae and Freddie Mac, federally backed home mortgage companies created by the U.S. Congress to boost homeownership.

What do Fannie Mae and Freddie Mac Do?
These entities exist only to support the U.S. mortgage system. They don’t originate loans. Instead, after a loan has been issued, one of the entities will buy the loan from the lender if it meets their criteria. This is an important part of the mortgage market because it allows lenders to sell loans to Fannie Mae and Freddie Mac and use the cash raised to engage in further lending.

For a loan to be purchased by Fannie Mae or Freddie Mac, the borrower generally needs:

  • A good credit score
  • A debt-to-income ratio of 50% or less
  • At least 3% down payment
  • A loan amount of less than conforming loan limit

2021 conforming loan limits
Each year, the Federal Housing Agency decides what the conforming loan limit is. As houses become more expensive, the limits are increased. In 2021, the amount increased for all units.

2021 Conforming Loan Limits
UnitsBase LimitHigh-Cost Limit


Base limit: This is the maximum loan amount for homes in most areas of the United States.

High-cost limit: This is the maximum loan amount for homes in high-cost markets such as parts of Alaska, Hawaii, California, and Washington, D.C.

Units: The number of housing units per building.

More >> See what the conforming loan limit is where you live.

Because conforming loans can be re-sold, they’re not as risky for lenders and often have favorable terms for borrowers. Savvy home buyers will keep their loan amount within the conforming loan limits so they have an easier time securing their loan, they’ll have more relaxed requirements, and their rates will probably be better.

If you’re looking for a conventional 15 or 30-year loan (as most people are), you may want to consider keeping the loan amount under the loan limit in order for it to be a conforming loan.

When you need a bigger loan – consider a jumbo loan
If the limits won’t get you a home you’re interested in buying, you could look into a jumbo loan. Jumbo loans won’t be purchased by Fannie Mae or Freddie Mac, so they don’t need to conform to their loan limits – meaning you can get more money. If you have a strong credit score and low debt-to-income ratio, you may find a lender willing to extend one to you.

However, they come with some disadvantages. Jumbo loans have stricter qualification rules, require a sizable down payment (sometimes 20% or more), and normally have a higher interest rate. For those reasons, a lot of homebuyers try to avoid them by finding a home that will keep them within the conforming loan limits.

To see whether you’ll be eligible for a conforming home loan, contact your local Mann Mortgage home lender. Together, they’ll help you crunch the numbers to see what type of loan would be best for you.

Get Started in Less Than 10 Minutes

Get pre-approved with our online mortgage application. It’s simple, fast & secure!