CHARLOTTE – A couple of weeks ago we mentioned how the conventional loan limits have increased, in which allows individuals to borrow larger amounts, with smaller down payments. The great news is the trend has continued through FHA as their loan limits have increased from $420,680 to $472,030. That is one of the largest year-over-year increases that we have ever seen. So, what does this mean to the consumer and how does it help?
First and foremost, it means that a buyer can now use an FHA loan up to a purchase price of approx. $490,000 with putting down the min. 3.5% down payment WITHOUT having to be a first-time homebuyer. FHA also gives a borrower the ability to have a credit score as low as 600 (sometimes even less) and still qualify for a loan, whereas conventional is set at 620. Last, but not least, an FHA loan will allow one to have their debt compared to their gross income be as high as 56.9%, whereas conventional will go no higher than 49%. With all that information, one may be asking what do these numbers actually mean. Very simply put, this all means that now a prospective homebuyer can afford more house (about $50,000 more), with less money down, and not have to have perfect credit (without having a drastic impact to rate/fees).
Great news is always fun to share. If anyone has any questions, please do not hesitate to call/text/email (email@example.com / (704) 430-6138. Happy Holidays!