FHA announced that it too will be increasing it’s loan limits in some counties. (Click here to request a list of the increased county loan limits, or to see if they effect you.)
While that might be good news for home owners, sellers, or those looking to refinance – It might just be a sign of bad news for others. Here’s why new FHA Loan Limits are bad for some people. Loan limits are a reflection of increased housing costs. As housing continues to cost more, it becomes less affordable for some. If you’re one of those on the fence waiting to buy a home, this is not great news.
If you couple that with the potential for rising interest rates, the result could be less affordability.
- For example
- Purchase of 350,000
- at 3.5% note rate, it might take about $60k/yr household income to qualify.
- but at 4.5% it would take about 5k more per year.
That’s almost an 8% increase in income requirements for the exact same home at the exact same price! You can imagine that if prices of homes continue to go up, this affect will be compounded. Keep in mind that FHA did this last year too – trend maybe?
If you’re on the fence about buying, your waiting may end up costing you more money. Click my name below to get in touch and review your situation to see when now would be a good time to buy your next (or first) home.
- Jeremy Beck
- Mortgage Planner
- Flip Side Analyst