Categorized | Finance and Mortgage

FHA Loans Will Change Come September

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With FHA loan limits facing a reduction in September, now may be the perfect time to secure a mortgage loan to buy a home.

If you’re looking to become a first time homeowner, or would like to purchase a fixer-upper, then you’ve most likely considered a loan insured by the Federal Housing Administration, more commonly known as FHA. FHA Loans have been a preferred option between both groups, as they’ve included loan limits as high as $660,000 at interest rates as low as 3.5%. However, upon the loan limit for high balance FHA loans expiring in September, it will be reduced to $520,700.

Despite the reduction in the limit, most realtors and lenders do not believe it will have a significant impact. In general, most prospective homebuyers that use FHA loans are those that are looking to buy either starter homes, or homes in need of repair, and rarely do their costs go above $350,000. Furthermore, jumbo loans will still be available for those looking to go above and beyond the new limit.

FHA loans are often popular among families that are first time buyers because the low interest rates allow for smaller, more affordable monthly payments.

For those families that are looking to buy a home using an FHA loan over the new future limit, it is strongly advised by both lenders and realtors that they do not wait, as the loan process must be completed by the expiration date of September 30. With the current low interest rates, and the loan limit set to face a reduction, it may just be the perfect time to buy.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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