Low Mortgage Rates Pushing Home Values Higher

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Low Mortgage Rates Pushing Home Values Higher

This BLOG On Low Mortgage Rates Pushing Home Values Higher Was PUBLISHED On June 30th, 2019

Low Mortgage Rates Pushing Home Values Higher

Home values throughout the United States continue to climb.

  • Home prices are at the highest value since the real estate and credit meltdown of 2008
  • Home values nationally are up 5.1% from the same period last year, 2018
  • Housing demand is overcoming the supply in housing nationally
  • This coupled with low mortgage rates and the introduction of the 3% down payment on home purchases on conventional loans and the reduction of the FHA annual mortgage insurance premium has driven home sales and increased home values nationwide
  • Many renters are now considering becoming first time home buyers

In this blog, we will cover how Low Mortgage Rates Pushing Home Values Higher.

Low Mortgage Rates And Reduction Of FHA Mortgage Insurance

Low Mortgage Rates And Reduction Of FHA Mortgage Insurance

Low mortgage rates and the reduction of FHA annual mortgage insurance premium has attracted many renters into buying their first home.

  • Why rent when you can buy? 
  • Many renters, especially in California, Illinois, Georgia, Michigan, North Carolina, Texas, Florida, and Indiana are paying more than $1,500 or more to rent a single family home
  • A lot of times, being a homeowner can be cheaper than renting and you get to write off the mortgage interest on your income taxes

With low mortgage rates and the combination of HUD lowering their annual FHA mortgage insurance premium, a home buyer will have more buying power.

Low Mortgage Rates And Low Down Payment

Low Mortgage Rates And Low Down Payment

Combination of low mortgage rates and the re-introduction of the 3% down payment on conventional home purchase loans announced by Fannie Mae and Freddie Mac has sparked interests from renters. More renters are planning in buying a home now who previously had no plan in becoming first time home buyers.

  • The new 3% down payment on a conventional loan for first time home buyers is less than the low 3.5% down payment required on FHA home purchase mortgage loans
  • Home buyers normally do not have to worry about closing costs
  • This is because closing costs can be covered by a sellers concession
  • Or in the event, if the home seller is not willing to work with a sellers concession, the home buyer can get most or all of his or her closing costs covered by the lender through a lenders credit towards closing costs

Home Loan With Bad Credit And Low Mortgage Rates

Home Loan With Bad Credit And Low Mortgage Rates

FHA, VA, Fannie Mae, USDA, and Freddie Mac have all lowered their credit guidelines to promote homeownership nationally.

  • HUD has reduced its FHA annual mortgage insurance premium from 1.35% to 0.85% a few years back
  • HUD has increased loan limits for three years in a row due to rising home values
  • HUD maximum loan limit cap for 2019 is $314,827
  • HUD has also raised the FHA loan limits for many parts of the country like California where the areas are classified as high-cost areas
  • High-cost counties in the state of California has FHA loan limits up to $726,5151
  • Many counties in states like Illinois, Texas, Florida, and Indiana have high-cost areas where the FHA loan limits are much higher than the standard $314,827 FHA loan limits
  • FHA minimum credit score requirements to qualify for a 3.5% down payment home loan is 580 FICO
  • HUD has discontinued the FHA Back to Work Extenuating Circumstances due to an economic event mortgage loan program
  • This program reduced the waiting period after bankruptcy and foreclosure to a one-year waiting period to qualify for an FHA loan
  • HUD also has loosened the credit qualification for home buyers where collection accounts do not have to be paid to qualify for an FHA loan
  • Prior bad credit is acceptable and medical collections do not count and can be ignored by lenders
  • HUD also allows for non-occupant co-borrowers to be added on the loan so the main borrower can qualify
  • HUD also allows the down payment for a home purchase to be gifted by a relative or family member
  • HUD also has the FHA 203k loan where a home buyer can purchase a fixer-upper
  • The lender can fund the acquisition and construction loan all in one loan with a minimum of 3.5% down payment on the after-improved value

For more information about the contents in this blog or other mortgage-related topics, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com.

This BLOG On Low Mortgage Rates Pushing Home Values Higher Was UPDATED On June 30th, 2019.

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