New Year For Mortgage & Real Estate:
Many Changes Implemented And On The Horizon
Now that the holidays are over and 2009 has finally begun, it is time to take a look at many new changes on the forefront for the mortgage and real estate marketplace. With 2008 finally in the rearview mirror, we are certain to still see greater Government intervention and changes that may make 2009 a brighter year than the last. With that being said we will begin to take a look at some of the key factors in 2009, this week we look at changes to FHA mortgages.
FHA Financing
2008 was certainly a year that saw a revival of the FHA mortgage and 2009 will be a year where FHA loans will continue to play a major role in the mortgage marketplace.
As previously mentioned in recent articles, the minimum down payment on an FHA mortgage has now been increased to 3.5%, from 3.0%. While not a tremendous change, this can affect home buyers who are on the verge of purchasing a home. For instance, a buyer looking at a $200,000 home will now need an additional $1,000 for down payment.
As well, FHA loan limits in many metropolitan areas have now been reduced. Locally in Arizona, the loan limits in Maricopa and Pinal County have been reduced to $271,050, which represents a major change from the $346,250 limit that we saw in 2008. This will force loans with higher balances to use conventional financing.
In addition, there have been some changes to refinance options for homeowners. First, there is an option potentially available for homeowners who are in an existing FHA loan to refinance into a new FHA loan without an appraisal. This is significant considering the recent drop in interest rates, as it may allow borrowers the ability to refinance with a lower payment, without an appraisal. This will only be available for homeowners with an existing FHA mortgage and all other standard qualifications will still apply.
On the other side of the spectrum, the FHA will implement stricter guidelines on cash out refinances. As any cash out refinance transaction with a loan to value over 85% will require two independent appraisals. This is undoubtedly a tool for the FHA to make sure they are taking more precaution with this type of higher risk loan.
These are just some of the many changes that will affect the mortgage and real estate market. As always, we will continue to keep you updated on the most relevant events a weekly basis throughout the new year
For more information on current mortgage programs, rates and more, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
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