Business & Tech
House Hunt: FHA Loans Are Changing Soon
At the end of September, conforming loans' rates change.
OPEN HOUSES THIS SUNDAY 1PM - 4PM
$699,500. 898Limerick Lane, Healdsburg, 2Brm, 1Bth + 1/1 Coldwell Banker Healdsburg
$740,000. 720 Center Street, Healdsburg, 3Bdrm, 2Bdrm, Full Spectrum Remax
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$255,000. 230 Red Mountain Drive,Cloverdale, 2Bdrm, 2Bth, Century 21 Healdsburg
$399,000 544 Westmont Court, Healdsburg, 3Bdrm, 2.5Bth, Full Spectrum Remax
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$359,000. 438 Terrace Blvd, 3Bdrm, 2Bth, Coldwell Banker Healdsburg
FHA high balance loan limits to expire on Sept. 30. The loan limits were set at $660,000. And the new limit will be at $520,700. If you are purchasing a home for an amount that is higher than this you will need to get a jumbo loan.
“I do not think this will be a big game changer," Hunt Conrad of Prospect Mortgage remarked. "Jumbo’s rates are not that much higher than high limits and the bulk of FHA borrowers are purchasing below this level for the most part.”
FHA loans have been popular again during this economic downturn. They allow as little as 3.5 percent down. They are a great tool to get families into homes in this market.
Again, I can hear people saying “Isn’t this what got us in this mess in the first place?” Not really. You see, most of these loans are being used to purchase homes in the $350,000 and under range.
With the interest rate on these loans at around 4 percent in some cases, it keeps the payments well within reach for many families. I saw 3.34 percent on a five year last week.
In Healdsburg, the USDA Rural Home Loan program is a good option. Many lenders do not deal with these although they are a great product with many of the best parts of popular program.
Just mention it to your lender and they can do a side by side comparison of this program. Go ahead and try to prove me wrong on this one!
Loans in process that do not close by Sept.e 30, 2011 will not be grandfathered.
This means that if you are scheduled to close after Sept. 30, or if your loan is delayed for any reason that you could lose your ability to get that FHA loan if your loan exceeds $520,700. after putting your 3.5 percent down payment.
If you are waiting on a short sale to finalize, this could have a serious impact on your ability to qualify once the approval comes through from the banks if its after Oct.1.
More importantly, you qualify to buy less home. If you have been saving up your 3.5 percent down payment and money for closing costs, don't wait, buy now. Furthermore, interest rates are always a factor. Although we are at historically low interest rates, there is speculation those rates will rise in the future because they are so low.
Climbing interest rates and lower FHA loan limits translates to less buying power for today’s local buyer.
If you need any further information on this or any matters in the real estate world, please feel free to drop me a line. My team stays up to date with all of these factors.
