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Current loan limits for an FHA insured mortgage are 115% of an area’s median home price, not to exceed $625,500. When the new Housing Bill takes effect, this loan limit will become permanent.
Fannie Mae and Freddie Mac loan limits will remain at $417,000 for this year. In 2009, the loan limits will reflect those of FHA with an increase in higher-cost areas to 115% of the area’s median home price.
It is important that you note the loan limits are based on an area’s median home price, which means that loan limits will be determined by locale. FHA will not insure any mortgage for more than $625,500 no matter what area the property is located in. Loan limits for Fannie Mae and Freddie Mac will range from $417,000 to $625,500 depending on area.
For Anchorage, Alaska, the loan limit is and will remain at $347,000 for a single family home. A single family home is defined as a home designed to house one family. This definition includes condos and town-homes.
FHA will allow a buyer to purchase a multi-unit home (up to four units) as long as the homeowner occupies one of the units. Loan limits for these properties are higher than those for single family defined homes.
Since Fannie Mae and Freddie Mac seem to be reflecting the FHA loan limits, it is safe to say that the loan limits for Anchorage will be the same as FHA ($347,000).
This does not mean that a buyer will not be able to finance a home that is selling for more than $347,000. The loan limit is not the sales price, but the amount the buyer is financing. The price of the home would be determined by the amount of the loan and the addition of a buyer’s down payment. Buyers can also apply for a “jumbo” loan if the loan amount exceeds the loan limit for the area. Jumbo loans have different guidelines, so you would need to consult with a mortgage lender who deals in these types of loans.
Contact an FHA approved lender to learn about FHA guidelines and for pre-approval.
Related Articles: FHA Best Bet and FHA Raises Loan Limits
Make the decision early on that, when you find your Alaskan dream home, you will hire the services of a home inspector. Although it is natural for a buyer to want to keep expenses to a minimum, waiving the right to a home inspection is not a wise choice.
A home inspector will make a visual inspection of the home, examining structure and home systems to determine if they are sound and working properly. It is best that you are present at the time of the inspection so the inspector may address any questions or particular concerns you may have.
Every home has problems; even brand new ones. Every problem has a solution but home inspections are not “fix-it” lists. They are designed to reassure you (not scare you) regarding the condition and value of the home that you are purchasing.
Home inspectors cannot determine when systems are going to fail. They can only determine the condition of the various system components at the time of the inspection.
A buyer will be provided a written report within a day or two of the inspection (some inspectors include pictures with their reports). The report will let you know what was inspected and what the findings for each item were. If a problem has been identified, the inspector will make a recommendation for further evaluation or recommend what needs to be done to remedy the problem. If an item is identified as unsafe, unsound, or not performing correctly, you will have the opportunity to address the issue with the seller before closing escrow.
A home inspector is not an appraiser and cannot determine the value
of the home. Home inspectors are not code inspectors. Home inspectors do look for safety issues but, if you are concerned about a home’s compliance with local building codes, that is another matter entirely. You need to let your Realtor know what your concerns are so that they may advise you on the options available to you for further investigation.
When determining which home inspection company you will use, ask to see a sample copy of an inspection report. Remember that quality is more important than quantity. Let the report determine who you want to use, not how much the cost of the report is.
Alaskan home inspectors are required to be licensed in the State of Alaska.
FHA allows buyers with credit scores below 700 to purchase homes. In the current mortgage credit crunch, FHA may be the best bet for first-time home buyers. First-time home buyers are defined as anyone who has not owned a personal residence in the last three years.
Another factor making FHA a viable choice in mortgage loans is that FHA has temporarily raised its loan limits. (FHA Raises Loan Limits).
IndyMac, one of the home lending giants for non-perfect credit borrowers, has gone out of the mortgage lending business, limiting mortgage borrowers’ options.
Your credit score is more important than ever when applying for a mortgage loan. Lenders look at your credit score as an indicator of your creditworthiness. Based on your credit score, lenders determine the risk of you becoming a foreclosure statistic.
Your credit score is based on your history in repaying your bills in a consistent and timely manner. Your income level, age, martial status, etc. do not influence how your score is determined. The only factor is your repayment history.
Prime borrowers have credit scores of 700 or higher and normally will have no trouble securing a mortgage loan. Sub-Prime borrowers are those that have scores below 660.
FHA’s goal is to help Americans achieve homeownership. They are not in the business of making risky loans but will not deny a loan strictly because the borrower does not have A-1 credit.
Never assume you cannot qualify for a mortgage loan. There are still many loan programs available but, in terms of interest rates, most come with a price tag. FHA loan interest rates are some of the lowest a borrower can obtain.
If you are considering purchasing a home in Anchorage, FHA may be your best bet. However, to really know what your purchasing power is and which loan program is best for you, contact a good mortgage broker.
The change in FHA’s loan limits can help you to achieve the American Dream, homeownership.
As part of the Economic Stimulus Act, FHA has been allowed to temporarily raise their loan limits. FHA will now insure loans up to 125% of an area’s median house price. The purpose of the increased loan limit is to provide buyers affordable mortgage loans and to help current homeowners who are facing possible foreclosure via FHA’s refinancing program FHASecure.
Due to the mortgage crisis, many lenders have tightened their lending requirements to such a point that many qualified buyers have not been able to obtain financing. FHA has filled the void by providing loans to many of these buyers. The increased loan limits will allow them to help many more. FHA can help homebuyers avoid subprime mortgage products like those that largely contributed to the current high rate of foreclosures and the mortgage credit crisis.
FHA also offers a program 203K (SF Rehabilitation Loan) which allows buyers to buy homes (single-family) that need some rehabilitating and repairs. This loan program offers a mortgage loan which combines both the mortgage and the cost of repairs into one loan. A major advantage of this loan program is that you can buy a home and do the repairs after your escrow closes.
Please remember that the key word here is: temporarily. On December 31, 2008, the new loan limits will revert to the previous limits unless Congress approves legislation to make the new limits permanent as part of the FHA Modernization bill which is currently waiting approval.
FHA Loan Limits for 2008
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