The Office of Federal Housing Enterprise Oversight (OFHEO) today released the maximum conforming loan limits that will be in effect through year-end as a result of The Economic Stimulus Act of 2008. That legislation permits Fannie Mae and Freddie Mac to raise their conforming loan limits in certain high-cost areas. The new limits are a function of median home prices as estimated by the U.S. Department of Housing and Urban Development (HUD).The maximum for temporary conforming loan limits, which apply to loans originated in the period between July 1, 2007 and December 31, 2008, are as high as $729,750 for one-unit homes in the continental United States. Two, three [...] Continue Reading…

Sometimes coming up with the cash for a down payment is the hardest part of any real estate purchase, especially for young couples entering the market for the first time. However, there are mortgages that let you put up a minimal down payment and get into housing. In this article, we’ll cover PMI mortgages, VA mortgages, FHA mortgages and FmHA home loans. Keep reading to learn how you can break down the down payment barrier.1. PMI (Private Mortgage Insurance) MortgagesIf you can’t come up with a 20 percent down payment, your lender may offer you what’s called private mortgage insurance. Since your lender is taking on a greater risk, [...] Continue Reading…

Government sponsored loan programs, such as FHA loans, have been getting a lot of press lately. But, how does an FHA loan differ from a conventional loan? What are the advantages of each?FHAThe Federal Housing Authority (FHA) was created in 1934 to help potential homeowners gain access to money to boost homeownership rates throughout the United States. FHA loan programs require very little money down on a new purchase (usually only 3% of the purchase price) and will lend up to 95% of the value of a home on a cash out refinance. This high loan-to-value ratio is the primary appeal of an FHA transaction.The FHA is not a [...] Continue Reading…

Most people automatically look for the lowest down payment option on mortgages. This knee jerk reaction is not always the best way to go.The Down Payment and Mortgage RelationshipA down payment is usually required when obtaining a mortgage. Although there are some down payment free mortgages available, these can generally tend to carry higher interest rates as well. When seeking to obtain the best terms, most options, and lowest interest rates, it is important to have some money set aside to make a down payment with. In general, the average down payment rate on mortgages currently varies from 0 to 20 percent of the mortgage value depending on the [...] Continue Reading…

If you’re like most Americans, your house may be the most expensive item you’ll ever buy, and your mortgage is likely the biggest loan you’ll ever need to secure. To ensure your long-term financial health, it’s important to take the time to find the best mortgage that offers the lowest interest rates and the smallest monthly payments, but enables you to pay off your house in a reasonable amount of time.One of the biggest considerations is whether it’s best to go with a fixed rate mortgage or an adjustable rate mortgage. Which mortgage type is better in the short term? Which will save you money in the long run?Fixed [...] Continue Reading…

Usually the greatest obstacle to making that home purchase is coming up with the infamous down payment, or as some like to call it, the “down painment.” This is particularly true of first-time home buyers, but can plague second-home buyers too. While saving is the most obvious way to muster up the needed cash, borrowing can be an answer too, especially to fill any gaps. Following are some unique and effective ways to both build your savings and expand your borrowing capacity.Building Your Savings Many people think they’re already putting as much money into savings as they possibly can or are willing to. The truth is, you can still [...] Continue Reading…

Jumbo loans are simply mortgages for higher-than-normal loan amounts. The gold standard of “normal” in the lending industry is what is called a “conforming, conventional” loan; that is, a loan that conforms to the secondary market agencies’ conventional underwriting requirements regarding credit, income/asset verification, property features, etc.As of February 20th, 2007, the maximum amount for this “conforming” loan is $417,000 for a single unit property, $533,850 for a 2-unit property, $645,300 for a 3-unit property and $801,950 for a 4-unit property. The conventional limit for second loans is $208,500 and all loan limits are 50% higher for properties in Alaska, Hawaii, Guam, and the U.S. Virgin Islands. [...] Continue Reading…

Conforming loans are known as “A” loans. These are loans that are funded by Fannie Mae (FNMA) and Freddie Mac (FHLMC). Jumbo loans are loans that exceed the maximum limit funded by Fannie Mae and Freddie Mac (currently $417,000 for single family homes). Jumbo loans, bad credit mortgage loans and any other type of non-conforming loan are known as “B” loans. “B” loans are more typically referred to as sub-prime loans which are underwritten by sub-prime lenders. Because sub-prime lenders don’t have to follow conventional underwriting rules, they have more latitude in lending practices. As a result, even if you have low credit scores, you may still [...] Continue Reading…

If you are buying a home in a state with high prices, you know financing can be an issue. This brings up the issue of the jumbo loan.The mortgage loans industry is unique compared to other financial markets. Why? Well, it has to do with the federal government. Specifically, the government provides mortgage financing to individuals by guaranteeing the debt owed to lenders, much the way a parent might do when co-signing a loan for child. Loans that the government will secure are known as conforming loans. These loans are much easier to get because the lender carries almost no risk when issuing them. If you default, the government [...] Continue Reading…

The down payment seems to be one of the most important factors in buying a home.  As it should be, because the more money you put down, the lower your total monthly mortgage payment will be.A down payment should be determined by the following questions:1.  How much can you afford?You should NOT consider all the money you have in your savings account towards the purchase of a home.  Why?  Well, let’s say the water heater happens to break down in the first year of buying the home.  That kind of break down can cost thousands of dollars!  It’s something most people would never expect, but it’s possible. You see, most people buy [...] Continue Reading…