It's one thing to have steady income, good credit, and a healthy debt-to-income ratio, but it's another to have the amount of cash to close. Buyers in Southern California are challenged with extremely large down payments that many are unable to afford. Thus, this change provides more borrowing power for those individuals.
Both FHA and Conforming loan balances are now higher in nearly every county across the nation, signaling a healthy and growing economy and market. This could make the difference for those renting and looking to become homeowners in 2017.
Not only do FHA loans now allow lower down payments, but they are also much more flexible and accommodating to the difficult situations that face potential homebuyers. Some of these things include:
- Debt-to-income ratios as high as 55%
- Credit scores as low as 580 for loans up to $424,100 and as lows as 640 for loans exceeding this amount
- 3-year waiting period on previous short sale
- 3-year waiting period on previous foreclosure
- 2-year waiting period for Chapter 7 bankruptcy
- Allows a borrower to refinance a second mortgage with LTV (loan-to-value) up to 95.6%
There's been a lot of buzz about the potential 2017 holds for many renters looking to become homeowners. Now, with these new FHA limits in effect, this could be a very favorable vehicle to help consumers fulfill their home-buying dreams.
Author:Kurt Galitski Phone: 714-957-6677 Dated: January 2nd 2017 Views: 273 About Kurt: After 15 years of founding and running a successful boutique real estate office in Costa Mesa as a l...
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