FHA loan limits are moving higher as part of the Economic Stimulus package that President Bush signed into law this past week. Why should this matter and how will it impact the West Chester and Liberty Township, Ohio real estate market? Great question!
1.) The higher loan limits when they are published by HUD will allow a significantly higher number of buyers to qualify for an FHA loan, which has less stringent qualifying criteria and lower down payment requirements.
2.) This change in the loan limits may open up some additional avenues for buyers to obtain financing, which will certainly impact our West Chester and Liberty Township real estate market. Many borrowers, in particular first time home buyers, have felt that they may not be able to get a mortgage loan due to all of the recent news and talk about the sub prime mortgage mess.
The National Association Of Realtors has developed an “estimated” amount of the new loans. These are only estimates at this time. HUD has 30 days to publish the new loan limits. The estimated FHA loan limit for West Chester and Liberty Township, Ohio are $337,500, which is a significant increase from the old limit of $256,500.
Interest rates have moved higher in the last couple of weeks. Just three weeks ago a 30 fixed rate loan was 5.49% with no points and as of Friday it was now 5.80% with no points. Ouch! Will the rates go lower again? It is so hard to say if rates will go up or if they will go down and if someone tells you they do know the answer, proceed with caution. My sense is that we are in a range for rates that we will probably stay in for a while. With rates moving slightly lower and then back up slightly higher. There is no doubt in my mind though, at some point, there will be people saying they wished they hadn’t waited so long and missed out on the opportunity to get a 5.5% or so interest rate.
Your comments and thoughts are always welcome!