The Senate has recently passed Senate Bill S 2338 which changer dramatically the structure of the standard FHA programs. In recent years FHA programs have not been used to any extent here in California due to the median home prices being much higher than the $362,790 loan limit established for most of the state along with the North Bay area. With the passing of the above bill, loan limits will be raised to the Fannie Mae and Freddie Mac conforming loan limits of $417,000. Along with those lines, the bill will also reduce the required 3% downpayment from the borrower down to 1.5%. This change alone will help many families the extra help they needed in purchasing a home.
However, with the increase in the loan limits to $417,000, this change will help those that need to refinance now. Those with adjustable rate mortgages with interest rates that have skyrocketed over the past months, or those that are about to reset to much higher rates. Currently many borrowers with adjustable rate mortgages are waiting to see if FHASecure is the better way to go. Currently it is not. Although some lenders have established FHASecure programs, most have not and those that have are charging roughly 1/2 to 3/4 higher interest rates than standard FHA programs. If you are currently up to date with your payments, the standard FHA program is the best way for a borrower to refinance in todays market.
Remember these key FHA Highlights:
Lower Down Payment: Currently FHA requires a 3% downpayment which can come from several sources. However, once the the bill is singed by the President, the required downpayment will be lowered to 1.5%.
Competitive Interest Rates: FHA loans have always been competitive with conforming loan pricing. Call today for a quote, you may surprised at what the current rate is.
Qualifying for an FHA Loan:It is much easier to qualify for an FHA loan than most people think. Because the federal government is backing the FHA loan, those with less than perfect credit or have extenuating circumstances may still get approved. Do not assume your situation will cause you to not be approved. Call today to see if you could be qualified.
Now is the time to start thinking about refinancing into an FHA loan. Once the bill is signed by the President, new doors will be opened for both currenthomeowners to refinance and First-time Homebuyers to purchase.
If you have further question about FHA loans or whether you can qualify for an FHA loan, please feel free to call me @ 1-877-392-0674 or my cell: 707-494-8532 and I will be happy to answer your questions.
Scott Dovala Ascent Home Loans Branch Manager
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