Minnesota Mortgage Blog

Part 1

FHA Insured Mortgages

There are a lot of things we don’t know yet but there are also things we do know.

This temporary increase is for loans approved on or before 12/31/2008.

The Secretary of HUD was granted authority to increase loan limits in 2008, based on the size and location of houses in certain areas.

FHA’s new base has been increased from $200,160 to $271,050

HUD is required to define the Area Median Prices in the country and publish new loan limits within 30 days of enactment.

The new limits will be 125% of the Area Median Price OR $729,750, whichever is less.

All FHA limits will be increased by something. Areas with low median prices will go to $271,050. Areas with higher Median Prices can go as high as $729,750.

And the catch –

HUD will determine Area Median Prices and until we know how HUD will determine the Area Median Prices, we don’t know what the exact amounts are.

This is very good news for FHA Approved Lenders!  Now we just need to wait and see what the Median Prices in our area will be. 

100% Financing

Starting this year, home buyers are going to NEED a down payment for a house. In most cases, a buyer will require a minimum of 3-5% to put down. For an average starter home at $200,000, First time home buyers are going to need $6,000 to $10,000 plus closing costs for a down payment.  

Plan ahead!!!

Meeting with a loan originator 6 month to 1 year before you plan to buy a home is more important than ever.  At Water Street Mortgage Corporation we refer to this as a Pre-Homebuyer Consultation and it is free.  Sometimes, we work with buyers for 2-3 years before they are ready to buy a home. 

The meeting takes only 1 hour.  We will review credit, income, and your goals for homeownership with you. We will make suggestions on how you can correct errors on your credit report, improve your FICO score, and save for your down payment.

At the end of the meeting, you will have a comprehensive written plan to follow, credit report, and contact information so you can call any time you have questions. 

We will follow up with a monthly email and then call you 3 months prior to the date you want to purchase your home and review your situation. 

When you are ready to shop for a home, we update your information prequalify you so you know what you can afford.

Joe Cook                                                                                                           

952-474-6060                                                                                                         Water Street Mortgage Corporation