FHA Loan Limits increase in Salt Lake County

How does $729,750 sound?  Yeah, I fell off my chair, too!  That's more than double the old limit.

FHA insured loan limits are now $729,750 for Salt Lake County.  These loans will be a shot in the arm to the luxury market across the valley, as more people can qualify with less money down.

But what about mortgage insurance?  Well, nobody likes paying for mortgage insurance. But often times interest rates are lower on an FHA loan than a conventional.  Let's look at a real example.

If mortgage insurance is .5% of the loan amount annually, then the monthly insurance cost on a $600,000 loan is $250/month.  That's a lot of money!  Or is it?  A .5% difference in the interest rates between conventional and FHA is almost $200/month.  And if you watch closely, you can find FHA loans at a significantly lower interest rate than conventional loans. Now imagine how much more the monthly cost would be for a non-conventional loan!

Another exciting possibility is for existing owners who'd like to refinance.  With so many buyers in expensive loans, FHA insured loans will offer  many the opportunity to move into a better product while obtaining an excellent fixed rate loan.

Loan limits in neighboring counties increased, as well.  These limits vary widely, so be sure to consult your loan originator for specifics. 

One last thing.  Remember that FHA loans are still assumable!  If interest rates go up significantly, sellers may have an advantage if they can offer an assumable, lower rate.  

FHA loans are not the answer for everybody, but for many they will provide new opportunities, a cheaper monthly house payment, and a path to success that may not have been otherwise achievable.