"The $25,700 increase in the single-family loan amount will allow more homebuyers to qualify for lower-rate conventional mortgages.  Conforming, or conventional, mortgages are usually 3/8 to ½ percent lower in rate than non-conforming jumbo mortgages," said Dan Gilbert, CEO of Intuit's Quicken Loans (INTU), a leading online mortgage lender and one of the largest retail mortgage lenders in the U.S.

Quicken Loans' action is based on today's announcement from the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), who set the upper limit for single-family mortgage loans to $300,700, a 9.34 percent increase over the previous ceiling of $275,000. 

Quicken Loans offers homeowners and homebuyers the following tips to help consumers take advantage of the new conforming limits:

Homeowners:
Homeowners with a jumbo loan should contact their lender to see if their mortgage falls within the new loan limit.  If it does, they can refinance their mortgage into a conventional rate loan which could significantly lower their interest rate.   Consumers can use the Quicken Loans Refinance Calculator at www.quickenloans.com/mortgagetools.asp to determine their potential savings.

"At current rates, the new loan limit can save homeowners a significant amount over the life of a 15 or 30-year fixed rate mortgage," said Gilbert.  "For example, a consumer with a jumbo loan at the new $300,700 ceiling can now refinance into a conventional rate mortgage, cutting their interest rate as much as a ½ percent or more."

Quicken Loans (www.quickenloans.com), in anticipation of this increase, raised its ceiling to $290,000 back in September, and has already saved consumers thousands of dollars.

Example.  William Rossi, of Thousands Oaks, California refinanced a $290,000 loan through Quicken Loans, lowering his interest rate from 8 percent to 6.375 percent and his monthly payment from $2,771 to $2,506.  This amounts to a yearly savings of $3,180 and savings of $47,740 over the life of his 15-year loan.

Example. Bradley Freeman and Tracy Schreiber of Raleigh, North Carolina, refinanced their $290,000 loan last week.  They lowered their interest rate from 7.875 to 6.375 percent, and their monthly payment dropped by $244 per month on a 15-year fixed rate loan.

Example.  Consumers with loans still above the new $300,700 conforming limit can still take advantage of this change.  A "piggy-back" transaction, which combines first and second mortgage, may be a smart solution for many of these consumers.  For example, assume you have a $350,000 mortgage.  According to the new loan limits, you can take out a conforming loan up to $300,700 and finance the additional $49,300 through a second mortgage.  If the old mortgage was at 7.75 percent the payment was $2,507.  Using a 7.125 percent conforming rate, and a 8.75 percent second mortgage rate, the new payment would be $2,414, resulting in almost $100 of savings each month.  

Homebuyers:
Consumers planning to purchase a home and get a mortgage that's above the current loan limit (called "jumbo" financing) but below the new conforming limit set by Fannie Mae and Freddie Mac can get an interest rate 0.625 percent lower than if they had taken out a jumbo loan.  Homebuyers should contact their mortgage lender to ask about the new loan limits. 

Example.  The increase to $300,700 means a client who needed to borrow $300,000 before the change would pay significantly more.  For example, a current 30-year jumbo rate is 7.625 percent.  The payment, at that rate, is $2,123.  Now that a $300,000 loan is considered conforming, today's rate is 7.0 percent.   That payment is $1,996.   This borrower will now save $127 each month or $45,720 over the life of the loan.

Fannie Mae and Freddie Mac are the two largest "secondary market" agencies that purchase loans from mortgage lenders.  Each year these two agencies set new limits for the highest amount of loan they will buy.  The limits are based on the national average home price as reported by the Federal Housing Finance Board, which today announced that the national average one-family home price had risen 9.36 percent to $219,600. 

Loans that comply with the Fannie Mae and Freddie Mac guidelines are called "conforming" loans.  They usually carry the best-available interest rates but also have more stringent qualification guidelines.  Lenders comply with these guidelines so they can package groups of conforming loans to sell to investors such as Fannie Mae and Freddie Mac in the secondary market.

Mortgage consumers can visit Quicken Loans Home Purchase and Refinance centers at www.quickenloans.com to learn more about the mortgage and refinance process.  Both centers contain calculators that can help consumers calculate the amount of home they can afford based on today's rates, or the potential savings achieved by refinancing.  Or consumers can call 1-800-QUICKEN to discuss the new conforming loan limits with a mortgage expert.

MEMO to Editors: Quicken Loans officials are available for interviews. Quicken Loans can also help you obtain interviews with recent customers. Contact Elizabeth Jones at 734/805-7137 or via e-mail at Elizabeth_Jones@QuickenLoans.com or Claudia DeMordaunt at 734/805-7977 or Claudia_DeMordaunt@QuickenLoans.com.

About Quicken Loans
Quicken Loans, a leading provider of direct-to-consumer home loans on the Internet, offers mortgages in all 50 states and the District of Columbia. The company provides a wide variety of home financing options including conventional, sub-prime, home equity, government and jumbo loans.  Quicken Loans combines cutting-edge technology and high touch personal service to give consumers a convenient one-stop mortgage shopping experience on the Internet. More than 800 experienced loan professionals located in the Quicken Loans' state-of-the-art Web/Call Center work directly with consumers throughout the entire process, while the Web site educates and empowers consumers through timely interactive tools and information related to the home financing process. Intuit Inc. acquired Rock Financial (and RockLoans.com) in December 1999.