The Federal Housing Administration (also known as FHA) reviews their mortgage limits every year. Home buyers should be aware of what these limits are and how they may change. Below is some helpful information on new limits for FHA mortgages in Advance NC.
Definition of FHA Mortgage Limits
Mortgage limits reflect maximum mortgage values meeting the requirements of an FHA mortgage. The mortgage value is not the same as the purchase price. For instance, if you find a property for $ 400,000.00 and are paying a 3.5 percent down payment, then the mortgage value comes out to $ 386,000.00 .
FHA Mortgage Limits Calculations
FHA mortgage limits differ by market. Median property prices are compared to limits for national conforming mortgages. Conforming mortgages must comply with the Freddie Mac and Fannie Mae rules and can be sold in secondary mortgage markets. FHA takes 65 percent of the conforming mortgage limit as their bottom limit in low cost markets. Low cost markets are those where 115% of the median real estate value is lower than 65% of the conforming limit. For higher priced communities, the limit can reach 150% of the limit for national conforming mortgages. These cities are those where 115% of the median real estate price is higher than 150% of national conforming mortgage limit.
New Limits For FHA Mortgages In Advance NC
In low cost markets, the mortgage limit is $271,050. Mortgage limits for high cost regions is $625,500. Thus, in no community will the limit fall less than $271,500 or be higher than $625,500. This floor and ceiling matches the figures from 2014, but most markets fall in between this range and will thus have a difference for 2015. Adjustments may be made for the type of property as well. Exact mortgage limits for your community can be found online at https://entp.hud.gov/idapp/html/hicostlook.cfm.
Why Is It Important to Understand New Limits For FHA Mortgages In Advance NC
If you plan to use the FHA program, you should remain cognizant of the new limits for FHA mortgages in Advance NC. Selecting a home beyond the limit will result in a larger down payment or require you to change to a different mortgage program. For instance, if the mortgage limit in your market is $ 325,000.00 and you intend to give a 3.5 percent down payment, then your max price is $ 336,787.56 . Purchasing a house for $ 343,523.32 leads to a $ 6,735.75 shortage. You must come up with the difference. If you are a cash sensitive buyer, this can be detrimental. Remember that the maximum purchase limit may not be the same for each community that you are looking in. It is helpful to know this ahead of time.