Great News! The U.S. Senate recently voted 93 to 1 to raise the loan limits on government insured FHA (Federal Housing Administration) mortgage loans.
This is in response to the recent credit crisis and collapse of the sub prime mortgage market. The intention is that this will enable borrowers who deserve a mortgage to obtain one and at the same time allow those current mortgage holders to refinance their existing mortgages to lower payments.
FHA loans are frequently used for “first time homebuyers”. This is because these buyers commonly have decent credit, low monthly expenditures, but not a lot in the way of liquidity. An FHA Mortgage allows 97% financing with minimal out of pocket costs and more forgiving credit scores. FHA also offers attractive interest rates which is a big advantage over the high rates of previous sub-prime mortgages.
However, in the past FHA has been capped in Beaufort County at $284,000. With this increase in loan limits the new limit will be $387,500. This will allow more buyers to take advantage of home prices in Beaufort County and utilize the advantages of FHA Mortgages.
So what’s the bad news? At this point the Senate has only voted on this increase in loan limits until the end of 2008.
For more information on FHA Mortgages please call Tony Knapp from Mortgage Network at 843-341-0111.
Tony is a member of John Robinson’s Performance Team and a loan officer for Mortgage Network, Beaufort County’s largest and most respected mortgage lender.