FHA Loans....change coming????

                                FHA Mortgages

                 Is the Life Line for 1st Time Buyers History?

For many buyers, FHA mortgages are the least expensive way to finance a home.  The sole exception are military home buyers, past or present service people, who have the advantage of 0 down VA financing available.  Still the 3.5% down payment for FHA loans is much easier to save up than the 10% and very often 20% down payment required for Conventional financing.  Thus, there popularity with young and less well financed buyers.

I share the newsletter article from Al Clark as I know you will heare the news that FHA loan size are being cut.  You may not know this is important to you but it is.   If know that the loan limits set by FHA determines the maximum loan that FHA will insure, then you know a smaller loan value in a high price market could mean you can NOT QUALIFY for this low down payment load if your LOAN VALUE IS TOO HIGH.

But don't be alarmed!!!  In Hampton Roads, for example, there is no change to the loan limit from 2012/2013.  Thus, business as normal.  If you are reading this blog from outside Hampton Roads, you will want to contact your mortgage officer.  He or she will
know what the limit in your market is and whether there has been any change.

Knowing what your options are prior to starting the home search in Spring 2014, it a very smart move.  Should you be actively looking now, make the call today to see if you are impacted!

Happy New Year!!!

FHA MORTGAGES TO SHRINK IN 2014 FHA Loan Size Cut By Half In Some Markets The size of the biggest mortgage the Federal Housing Administration (FHA) can guarantee is going to drop by as much as 50 percent in some areas of the U.S. in 2014. Homeowners living in the highest-cost areas of the country will find their FHA loans capped at $625,500, down from $729,750 in 2013. To get a larger mortgage, you'll have to turn to the jumbo mortgage market, where you'll likely pay a higher interest rate because your jumbo loan lacks a government guarantee. The National Association of Realtors? predicts the maximum FHA loan amount will fall 20 percent or more in 146 U.S. counties and 10 percent or more in 300 counties. In some counties, the maximum size FHA loan will fall by more than 50 percent. FHA's website lets you check the loan limits in your county. Be sure to select the 2014 limits if you visit the site. NAR recently wrote to HUD Secretary Shaun Donovan pleading with him to reverse FHA's decision. "While the housing market has improved in many areas of the country, the recovery remains fragile and uneven, especially in many of the areas where HUD has most severely reduced FHA loan limits," NAR's letter said. "Many borrowers in areas affected by the reductions rely on FHA-insured products and would not have qualified under the low loan-to-value and tight credit standards currently required by the private market," the letter continued. "These conditions leave the American dream of home ownership out of reach for many families. Without access to affordable low down payment financing, families are unable to purchase orrefinance homes, and those who wish to sell find it more difficult, all of which will continue to prolong our housing crisis. As proposed, the turbulence these reductions will create runs the risk of reversing progress being made in the economic recovery."

New Loan Limits for 2011

With Christmas quickly approaching, thoughts of the New Year aren't far behind.  

Many of you may be planning to seek a new home in 2011.   With rates still below 5 % solidly(just closed a home today at 3.875% on a 30 year note!!!), it isn't a bad thought.

Though not all of you will purchase at the top on a mortgage loan limit, it is important to know what they are.  David Katz, Advance Mortgage, shared the update for 2011 below:
Following are the new mortgage limits for 2011:




                                             2011           2010

VA LOAN                         $417,000    $460,000

FHA LOAN                      $458,850     $458,850

Conventional Conforming $417,000 $417,000

Conventional High Balance $458,850 $458,850

The only change is the reduction in VA 100% financing from $460,000 to $417,000.

The Conventional High Balance (anything above $458,850 becomes a Jumbo loan) is good through September 30, 2011. This date could be extended by Congress.
 
Thanks, David!!
 
Any questions??