Well, it's finally here. The new FHA loan limits are officially out, that they have been changed. This will definitely open up the doors to new purchase deals, because the credit guidelines are more relaxed than conventional mortgages. Especially with Fannie Mae and Freddie Mac coming out with new appraisal guidelines in regards to ordering appraisals. Also, on a conventional mortgage, if you have less than a 680 credit score, you are penalized.
Overall, I could be describing more than 8 reasons why FHA mortgages are that much better, no matter how you look at things. Unless you are putting 20% to 30% down and/or you have a credit score above 680, the pricing on a FHA mortgage will be that much better.
For more reasons why FHA mortgages are easier to obtain and less expensive, please read this : Top 10 reasons FHA is a great way to finance your home....
For a very good reason why FHA mortgages are better than conventional mortgages with 10% down or less, please read :
Many of us are waiting for the HUD Mortgagee Letter that tells us that the changes have been made. Also, if there is any risk base pricing that might be applied to these new loan amounts. Many investors are not allowing the lenders to go over a loan amount of $417,000, no matter how high the loan limit in your area. But as it stands, the new FHA loan limits are official and can be found by going to this site. And keep in mind, these new loan limits, as it stands for now, are only good until December 31, 2008.
https://entp.hud.gov/idapp/html/hicostlook.cfm
Here is a preview of the high cost loan limits and it's areas.
High cost area limits are subject to a ceiling based on a percent of the Freddie Mac Loan limits
The ceilings are currently: |
| | | | One-family | | Two-family | | Three-family | | Four-family | |
| | FHA Forward | | $729,750.00 | | $934,200.00 | | $1,129,250.00 | | $1,403,400.00 | |
| | HECM | | $362,790.00 | | | |
| | Fannie/Freddie | | $729,750.00 | | $934,200.00 | | $1,129,250.00 | | $1,403,400.00 | |
Section 214 of the National Housing Act provides that mortgage limits for Alaska, Guam, Hawaii, and the Virgin Islands may be adjusted up to 150 percent of the new ceilings. This results in new ceilings for these areas of: |
| | | | One-family | | Two-family | | Three-family | | Four-family | |
| | FHA Forward | | $1,094,625.00 | | $1,401,300.00 | | $1,693,875.00 | | $2,105,100.00 | |
| | HECM | | $544,185.00 | | | |
| | Fannie/Freddie | | $1,094,625.00 | | $1,401,300.00 | | $1,693,875.00 | | $2,105,100.00 | |
The current basic standard mortgage limits for FHA insured loans are: |
| | | | One-family | | Two-family | | Three-family | | Four-family | |
| | FHA Forward | | $271,050.00 | | $347,000.00 | | $419,400.00 | | $521,250.00 | |
**** Word to the wise -- Just because the loan limits are set with maximums, doesn't mean that the lenders or investors will honor these new limits without some sort of penalty. For example : In Burlington County, New Jersey - the new loan limit is $420,000. But we just got a memo from one of our investors that at this moment, they will go up to $417,000 without any penalties or changes to the down payment.
What I am trying to say is....Typically with FHA, you can put the least amount down which is 2.25% as your down payment. Some of these lenders might want you to have the difference down up to a certain loan amount. A lot of this will be cleared up in the next several days as the lenders sort through the pricing criteria.
My advice, pick your loan officer and lender wisely. I had a client that spoke to a lender 3 weeks ago that told her that the new limits were out. That was FALSE, as you can see, because they just came out now. You just can't go off the new changes mentioned in the link that I supplied. We have to wait basically until the dust settles and that we get the particulars from those investors on Wall Street. ****
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For more information on FHA loans, please go to this link. The FHA Expert
For more information on how you can obtain your dream home, please click here : Mortgage Financing Options
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!
Copyright © 2008 by Jeff Belonger
Message: MORTGAGE LIMITS SUCCESSFULLY COMPLETED 
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