Mortgage and Lending with Augusta Financial, Inc. NMLS ID: 241368

Hello again,

With the industry changing daily (sometimes twice daily), I wanted to give everybody a heads up as to where we stand right now.  FHA loan limits have been increased for the rest of 2008.  This means that you can purchase a home that is 700K+ in some areas with only 3% down (which can be paid for by the seller or can also be a gift!!!) 

However, there are a few things to consider before jumping on the preverbal bandwagon:

1) If you are in a declining area, your loan with be cut by 5% meaning that you would have to come in with 5% down.

2) If you exceed a certain limit (417K in California for example) you will not be able to receive the 3% down payment as a gift.  This would bring your down payment total to 8% in a declining market.  On top of this, your rate could go up significantly.

3) All of your income will need to be proven via pay stubs, bank statements, taxes, etc.  However, most loans are headed this way already, so that is not a huge negative factor.

4) FHA loans are paperwork intensive and often take 45 days to close.

5) If you can only afford a 0%-3% down payment, maybe you shouldn't be purchasing a home right now.  ;)

With all of that said, FHA is a great way to go to avoid the 10%-20% down payments that many lenders are requiring in this "stabilizing" market.

If you have more questions, call us 1(888) 66-ADVICE, or directly at (661) 291-2205.

Hope to speak with you soon!

Aaron Reno

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QEC Internet Services - Long Beach, CA

This is a transitory time and there are pieces in the market that are still moving.  Due dilligence is key to investment decisions today.

Jun 05, 2008 05:33 PM