FHA loans are mortgages insured by Federal Housing Administration and provided by FHA-approved lenders in the United States of America. These loans are provided especially to low-to-moderate income borrowers who want to buy houses in the region. Just like other loans, the FHA loans require better credit scores and lower minimum down payments.
Currently, an individual can get up to 96.5% of the value of a property with an FHA loan. It will require the borrower to have minimum 580 credit score in order to get that loan. You will have to make a 10% down payment if your credit score false between 500-579. That’s the rule and it seems like FHA loan limit is going to increase in 2019.
With the rise in interest rates, it will be hard to forecast how this will impact the real estate market in 2019.
Is it true or fake news?
A number of residents in the United States of America are planning to apply for the FHA loans. Many believe it is just a rumor that FHA loan limits will increase in 2019. Well, it is not a rumor anymore because FHA has already announced the new loan limits for the next year. It is going to increase in
The loan limit in high-cost areas is between $679,650 which is going to change. It will be $726,525 in 2019. FHA has also announced that it will increase its floor to $314,827 which was $294,515 in 2018. So, if you are going to apply for an FHA loan after January 1st, 2019, you can get the loan according to these new limits.
Where the new changes will go into effect?
You must be sure about the changes will go into effect in your region before you apply for the loan. As per available details, over 3,000 counties are going to get a 7% boost for FHA loans. It is also true that about 181 counties will experience no changes in the next year. FHA is going to assess the loan limits depending on median home prices by metro area. So, everyone will not get the same mortgage in all the different regions of the country.
If you are a borrower willing to crack the present housing market with an FHA-insured mortgage, the new changes applied by FHA will be beneficial for you. Numerous borrowers will take advantage of high FHA loan limits combined with cooling prices in most of the corners of the country.
The Reverse mortgage limits will also change:
A reverse mortgage or FHA-insured Home Equity Conversion Mortgage is also going to get new limits. The previous limits were $679,650 during 2018 which are going to increase up to $726,525 in 2019.
Who should apply for the FHA loan?
People who are unable to afford a 20% down payment and who also do not have a great credit score, or who cannot afford to apply for a private mortgage, should apply for the FHA insured loans. This loan is a kind of assumable mortgage. Suppose you get the FHA loan and buy a property with that loan. You can sell that property to another buyer after some time and the new buyer can assume that loan. It does not matter if you have a very bad credit history or a bad credit score, you can still be a qualified person to apply for the FHA loan. So, go for it.
What is the catch?
You might be wondering about it because everything looks so great and attractive about the FHA loan. The FHA is going to increase the loan limits and you might probably planning to get it. Yes, there is a catch and it is as follows:
You will have to agree upon one of two kinds of mortgage premiums. The first one is paid in full and you can finance it if you want and another is paid monthly. You cannot get an FHA loan for every real estate property. There are some conditions set for the properties and if your chosen house meet those conditions, then only you can apply for an FHA loan. So, keep these things in mind before you plan to get an FHA loan.
It is certainly the best time to buy a new house and you should not wait anymore to apply for the loan. Get more details and apply for an FHA insured loan. You will get a much larger amount to acquire a new house. You should quickly get in touch with experts to know how to apply and what the terms and conditions are going to be.