3-6-2008 They have just released the new updated FHA loan limits.
For Minneapolis -St Paul and the majority of the Twin Cities area the loan limit for single family homes has just been increased to $365K for single family homes. Mpls-St Paul are considered hight cost areas-not everywhere in our state are we considered high cost. This means that going forward, you will be able to finance more homes using FHA financing. FHA financing is important to borrowers who want to be able to take advantage of some of the unique features of FHA mortgage loans. More borrowers and buyers will be able to benefit from this great government program.
For example, you can do a cash out refinance up to 85% loan to value.
You can do a rehab loan combined with an initial purchase loan under the FHA 203K
The FHA ARM has 1/5 caps with annual adjusters of 1%. Most conventioanl ARMS are 5/2/5 or 6/2/6 caps with an annual 2% adjuster and a higher margin.
You pay a monthly flat .85-9% MI (mortgage insurance) factor on 30 year FHA loans. It is lower MIP numbers (.85%) if you put down more than 5%. On 15 year loan, the monthly MIP is 0% (zero) with greater than 10% down, other wise it is .25% monthly. There is an upfront MI factor of 1% on FHA loans for either 15 or 30 year loans. This is usually added to the back of the mortgage. Private mortgage on Conventional loans vary by down payment and credit score and is usually just a monthly factor.
There are product changes on FHA reverse mortgage coming too. They just aren't here quite yet.
These are some of the major differences between a conventional and FHA Loan-there are more.
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