North Dallas 'Burbs Real Estate Talk

FHA financing has increased dramatically in the past year. Many consumers purchasing residential real estate for sale in Frisco, Prosper, McKinney, Allen and other surrounding North Texas areas have opted to take advantage of this type of mortgage loan for several reasons;

• Softer credit requirements (although a minimum FICO score of 620-640 is the marketplace norm)
• Lower down payments (as little as 3.5% down)
• Often better rates for borrowers with credit scores <740
• Higher qualifying debt-to-income ratios permitted

NOTE; the loan limit for FHA financing on a single family home is currently $271,050. And you will have to pay into the Mortgage Insurance Premium “pool” upfront (1.00%) and monthly (.90% annual premium paid monthly).

However, there is another factor to consider for future resale of a home. FHA loans are still ASSUMABLE. So, let’s say you have purchased a home at the now historically low rates. In a few years from now you may consider moving up. You could actually be at an advantage by marketing your home for sale with an assumable FHA IF the mortgage interest rates at that point in time are much higher. This becomes a very attractive option for buyers and can give you an edge over your competition. The buyer still must qualify for the loan, but they would be financing at the much lower rate. Buyers who benefit the most on assumptions are those who have the cash to pay the difference between the sale price and the balance of the old loan. That way they can avoid taking out a second mortgage and reap the full benefit of the low rate. The seller benefits in the form of a higher sales price.

Another FHA nugget that you may not be aware of is the 203k loan. This loan allows you to buy and renovate a home under one mortgage! This is great for buyers who may not otherwise be able to afford to renovate a fixer-upper. For more information, check out the HUD site at
http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm

 Check with your mortgage broker for details. Or call me if you need a referral. Once you have determined which type of loan is best for you and have been pre-approved, take the next step and search for a home here. We always offer great buyer incentives and have some outstanding ones right now!