FHA Mortgage Loan Limits Increase in 2019!

Bob Vaughan

Get Pre-Qualified FHA

 

 

The new year will bring higher mortgage loan limits for FHA Mortgage Loans. FHA announced the new mortgage loan limits for 2019 will increase across the majority of the country to $314,827 from $294,515. These changes will go into effect on Jan. 1, 2019.

The FHA Mortgage Loan Limit in Lee County will be $314,827
The FHA Mortgage Loan Limit in Charlotte County will be $314,827
The FHA Mortgage Loan Limit in Collier County will be $450,800

Our company is a full service mortgage company offering FHA Mortgage Loans, Conventional Mortgage Loans, VA Mortgage Loans, USDA Mortgage loans and Jumbo mortgage loans in the state of Florida. If you have any questions about mortgage loans, please call our office at 239-691-6546!

 

Wait, that’s all I need to buy a home???

Bob Vaughan

Our world is evolving, advancing and surging forward at a rapid pace. Are mortgage loans the same as they used to be? Believe it or not, many buyers today still believe they need 20% down to purchase a home, but as our world evolves so do loans. Today, there is an arsenal of loan programs with down payment options less than 20%! For instance, if you’re serving, or served in the military, it’s possible you can get into a home with 0% down (VA Loan). If you’re a first-time home buyer, it’s possible you can get conventional financing with as low as 3% down (conventional loan) and if you’re a repeat buyer you can buy a home with as little as 3.5% down using an FHA loan or 5% down with a conventional mortgage loan!

There are two main categories which impact how much cash a buyer needs for closing: down payment and closing costs. How much are closing costs? Generally, a good rule of thumb for estimating closing costs is between 3 – 3.5% of the purchase price. If you’re a repeat buyer and are going with a down payment option of 3.5%, you’ll need to add roughly another 3.5% for closing costs bringing the total to 7% of the purchase price.

However, if there is something nice about closing costs, it’s that the buyer doesn’t necessarily have to pay for them. It’s possible for a buyer to negotiate in an offer that the seller will pay for all, or a portion of closing costs. On an FHA loan, the seller can pay for up to 6% of closing costs and on a conventional loan with less than a 10% down payment, the seller can pay up to 3% of closing costs.

So, what is the minimum amount of money you need to purchase a $150,000 home with an FHA Loan? The answer is $5,250. The seller can cover all the closing costs for the buyer, which means the buyer would only have to cover the minimum 3.5% down payment!

What if a buyer doesn’t have money for a down payment, but a family member will give them the money? This would be considered a gift and is potentially an acceptable source of a down payment.

 

Call today for more information on mortgage loan programs with low down payments!!

FHA Lowers Mortgage Insurance Premiums

Bob Vaughan

The United States Department of Housing and Urban Development (HUD) announced Monday that the mortgage insurance premiums on loans insured by the Federal Housing Administration (FHA) will be reduced by 25 basis points for loans closing on or after January 27, 2017. The most popular down payment for an FHA mortgage loan is 3.50%, which currently carries MIP of .85% annually. With the new change, MIP will be reduced to .60%, saving someone with a $200,000 mortgage approximately $500 annually. This will result in huge savings for FHA borrowers and will also help lower debt-to-income ratios, ultimately leading to higher affordability for FHA borrowers.

What does the Fed Interest Rate Hike Mean for Mortgage Rates?

Bob Vaughan

It had been nearly a decade since the Federal Reserve increased the target rate and seven of those years had been spent near zero percent. This historical length of accommodative monetary policy all came to an end on Wednesday, December 16th, when the Fed announced a quarter of a point increase to their target rate, increasing it to .50%.

Mortgage interest rates don’t directly follow the fed funds rate and are not expected to shoot up in the short term, but experts are calling for a 1% – 1.5% increase over the next 12 months. The average homebuyer isn’t quite aware of how low mortgage loan interest rates really are right now. According to CNBC, sixty-seven percent of prospective homebuyers surveyed by Berkshire Hathaway HomeServices, a network of real estate brokerages, categorized the level of today’s mortgage rates as “average” or “high.” The current rate of 4 percent on the 30-year fixed is less than 1 percentage point higher than its record low; this is drastically lower than the 18% the market saw in the 1980’s.

So is now the time to get a mortgage loan? Doug Duncan, senior vice president and chief economist at Fannie Mae may have put it best: “The rule for when is it time to buy is always the same: given your household budget and where current interest rates are, if it makes good financial sense to take out a home loan today, then today is the day to do it.”

 

 

Good News for Interest Rates

Andy Davis

The Federal Open Market Committee at the end of January calmly resisted the urge to set into play an increase in key interest rates, saying for now that holding the federal funds rate at 0-1/4 percent is “appropriate.” The FOMC statement described U.S. economic expansion since December at “a solid pace”–optimistic language not seen in previous statements. “Labor market conditions have improved further, with strong job gains and a lower unemployment rate,” the statement said. “On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish. Household spending is rising moderately; recent declines in energy prices have boosted household purchasing power. Business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices. Market-based measures of inflation compensation have declined substantially in recent months; survey-based measures of longer-term inflation expectations have remained stable.” But the FOMC made no move to put a rate increase in place, saying in determining how long to maintain the target range of 0-1/4 percent, it would continue to assess progress toward its objectives of maximum employment and two percent inflation. Source: MBA