The Federal Housing Finance Agency (FHFA) has announced new 2022 conforming loan limits for conventional loans. The baseline conforming loan limit for 2022 will be $647,200, up $98,950 from 2021’s limit of $548,250. That is a record-high increase of 18% based on the FHFA House Price Index.

In higher-cost areas, the new loan limit increases to $970,800, or 150% of the baseline loan limit. This ceiling applies to residents of Alaska, Hawaii, Guam and the U.S. Virgin Islands, as well as areas in which 115% of the local median home value exceeds the baseline conforming loan limit.

Mortgage loans above these limits are considered non-conforming loans, or jumbo loans. If your loan amount qualifies to be a jumbo loan, you may face stricter underwriting criteria, such as higher credit score and down payment requirements.

Out of all the mortgages out there, a 15-year mortgage will likely save you the most amount of interest. 15-year mortgage rates are almost always lower than 30-year fixed mortgage rates.

Further, because the mortgage fully amortizes across a 15-year duration, you will likely pay off your mortgage sooner than if you had a 30-year amortizing mortgage.

The beauty of an economic downturn is cheap credit. And when there is a global pandemic, mortgage rates tend to go dow. As a result, every homeowner should be refinancing their mortgage right now as rates hover near all-time lows. Here are some home mortgage refinancing tips from someone who has refinanced many times.

Since 2003, I have refinanced five properties over a dozen times. These home mortgage refinancing tips are straight from experience. As a result you can pay the lowest fees and get the lowest interest rate possible.

Check the latest mortgage rates online through a marketplace like Credible. They have one of the largest lending networks around. There’s no obligation and you’ll get real quotes from qualified lenders in minutes.

Refinancing can be a daunting process, but it shouldn’t be with the right representative and proper frame of mind.

I refinanced my primary residence in 4Q2019 with a 7/1 ARM at 2.625% with no costs. In 2020, I got preapproved for a 7/1 ARM at only 2.125% because interest rates declined even further!

I do have relationship pricing because I’ve got over $1 million in assets with the lender. But even if I didn’t, I could get a 7/1 ARM for only 2.5% in 2021+.

As someone who has refinanced over 10 mortgage loans since 2005, let me share with you my mortgage refinancing tips to help you get the best rate possible.

The ideal mortgage amount was $1,000,000 before the Tax Cut & Jobs Act was passed for 2018 and beyond. Today, the ideal mortgage amount is $750,000, if your income can afford it.

The reason why $1,000,000 was ideal was because that was the mortgage limit for where you can write off the interest. Today, that ideal mortgage amount is $750,000 because $750,000 is the maximum mortgage you can take to be able to write off the mortgage interest.

Back in 2002, a $1 million mortgage cost around $50,000 to $65,000 a year in interest expense given mortgage rates were 5%-6.5% for a 5/1 ARM or a 30-year fixed. Multiply the annual interest expense by three, and you get $150,000-$195,000, the minimum annual income recommended to take out such a loan.

In 2022, a $1 million mortgage costs around $25,000 – $35,000 a year in interest expense given mortgage rates are now 2.5% – 33.5% for an ARM or for a 30-year fixed. Interest rates plummeted to all-time lows in 2020 due to coronavirus fears. However, interest rates are finally ticking back up as the economy reopens.

Mortgage rates will likely stay low for the rest of our lives. As a result, I’m still very positive on the housing market long term. If you plan to own a property for more than five years, I would buy.

If you’re focused on paying off your mortgage, good for you. It’s generally always good to pay down debt. However, I’d also like to share with you the biggest downside to paying off your mortgage that may surprise you.

It’s been seven years since I paid off my rental property mortgage. It was a mortgage for $464,400 I took on in 2003. For the first year after paying off my mortgage, I felt great. But after that, the satisfying feeling of getting rid of debt wore off.

Perhaps the reason why the feeling was so ephemeral was because there was no congratulations card or fancy French Laundry dinner celebration. The only thing that changed was the extra ~$2,500 a month in cash flow, which went straight to savings or investing.

Before taking on this mortgage, I experienced an eerily similar feeling of ambivalence in my early 20s. After working for 60 – 70 hours a week from 1999 – 2001, while saving 100% of every bonus and 50% of each paycheck, I started thinking: what’s the point of it all? 

Maybe I was experiencing a quarter life crisis back then. What I did know was that my enthusiasm for working in finance faded after the September 11, 2001 terrorist attack.

In 2003, with my lack of enthusiasm, I was *this* close to leaving San Francisco for Honolulu until I found a 2/2 condo overlooking a park in Pacific Heights for $580,000. Once I took out the $464,400 mortgage, my motivation to work hard shot through the roof!

Suddenly, my work felt more meaningful because if I stopped paying my mortgage, I’d lose my $116,000 down payment and trash my credit score. Without dependents, finally, I had something tangible to work hard for.

Refinancing a mortgage today is a smart move because interest rates have fallen to all-time lows partially due to the coronavirus pandemic. This post will teach you how to get the lowest mortgage interest rate possible to save money.

Thankfully, homeowners have gained a huge amount of equity since 2012. They aren’t going to foreclose or short-sale for nothing. In fact, I think 2021 and beyond is a good opportunity to buy real estate due to rising affordability and an underperformance in real estate prices compared to the S&P 500 in 2019 and 2020, which was up 31% and 16%, respectively.

I’ve refinanced multiple mortgages across multiple properties since 2003. I also recently refinanced my mortgage in late 2019 and got a new mortgage for only 2.125% in 2020. Here are my strategies for how you can get the lowest mortgage rate possible.

When there are mortgage market abnormalities, we must take advantage to get the lowest rate and best terms possible.

Currently, there are two mortgage abnormalities today to be aware of:

1) The average 15-year mortgage rate is way below the average 5/1 ARM and 7/1 AM rate. Therefore, you should take advantage.

and

2) The average 30-year mortgage rate has been lagging behind while the 10-year bond yield has been going up. Therefore, the 30-year fixed rate mortgage looks very enticing as well.

As a result, if you are looking to refinance your mortgage or are buying a house, get either a 30-year fixed or a 15-year fixed. Both are offering the best value out of all the mortgage products that current exist today.

Credible is my favorite place to refinance a mortgage or get a new mortgage. You’ll get real, no-obligation quotes from competing lenders in minutes. Take advantage of the current mortgage market abnormality!