FHA Loan Limits, Interest Rates Impact West Chester Ohio Real Estate

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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!

FHA Financing – Perfect For 1st Time Homebuyers

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FHA Financing is back!

Actually, it really never went away, but was certainly overtaken by the many loan programs that became such hot commodities the last few years.  Many of these loan programs were the subprime mortgages that we now hear so much about in the media.  And while most of these programs are now long gone, as are the lenders that made them, the FHA loan is now back in fashion.

Why is it such a good loan program for the first time homebuyer.  Among the many reasons are it’s low down payment requirement, it’s more lenient qualification guidelines and… the rates are so low right now that it is an incredible deal.

Here is a scenario that I created today as an example:

Buyer buys a home for a purchase price of $150,000. 

Using the FHA loan, the rate as of today is 5.75% with just a 3.00% down payment. 

By the way, that 5.75% interest rate today was for 30 years, fixed rate.  (No adjustable rates with skyrocketing payments in a year or two). 

In this scenario, the buyer’s monthly payment for principal and interest would be only $849.10!

This payment does not include property taxes and homeowners insurance, but what an opportunity to buy a home and stop paying rent with a truly low monthly payment.

And by the way, FHA loans are not just for 1st time homebuyers! 

If you would like more information on FHA loans or for that matter any other mortgage financing let me know and I will get you in touch with a top mortgage consultant.

More detailed information on FHA loans by clicking here