Borrowers who are considering using an FHA Mortgage to purchase or refinance in San Diego and San Diego Mortgage Brokers should be happy to hear the recent annoucement that FHA’s higher loan limts have been reinstated. Congress recently voted to increase FHA’s loan limits back to the 2010 levels for the rest of 2011 and 2012.
For San Diego FHA loans that means that San Diego County now has a loan limit of $697,500 again. As of October 1st, 2011 the loan limits had been decreased in San Diego County to $546,250 for FHA loans and conventional loans. The conventional loan limits in San Diego County will stay at the $546,250 for the rest of 2011.
For those who are not familar with FHA Loans, here is a brief overview. An FHA (Federal Housing Administration) Loan is a government loan which allows borrowers to purchase a San Diego home with 3.5% down payment or refinance a San Diego mortgage up to 97.75% Loan to Value (LTV). An FHA Mortgage also allows a borrower to qualify at a higher debt to income ratio than a conventional loan and with credit scores as low as 600.
FHA loans are used many times by First Time Homebuyers in San Diego because of the low down payment and program flexibility, but you do not need to be a first time homebuyer to use an FHA Mortgage in San Diego.
Additional FHA Benefits – San Diego
There are many other benefits to the FHA mortgage program for buyers and borrowers in San Diego. The whole 3.5% down payment on a purchase can be gifted to the buyer by relatives. This allows a client to buy a home in San Diego without having to accumulate the down payment on their own.
FHA Mortgages in San Diego also allow non-occupying co-borrowers. For example, if a buyer can’t qualify to purchase in San Diego by themselves the buyer’s parents or another relative, can become a co-borrower and use their income to help qualify even though they are not residing in the home. This is a great way for First Time Homebuyers to get into the housing market in San Diego.
FHA mortgages also allow the seller to pay up to 6% of the purchase price to cover the buyer’s closing costs. At the time of this posting, interest rates on FHA loans in San Diego are about .125% – .25% better than conventional loans. Please feel free to contact The Mortgage Planners, a San Diego Mortgage Broker and Banker if you would like to get a free quote.