Mortgage Rates at Record Lows
Rates on 30 year fixed-rate mortgages have fallen to record lows in the last few weeks causing loan applications to surge to their highest level nationally in more than five years. The drop was spurred by the Federal Reserve's pledge to channel billions into the troubled U.S. housing market. The obvious benefits of lower rates include:
More first-time homebuyers are able to qualify for a loan.
Move-up buyers can get more home for the same monthly payment.
A general increase in consumer optimism. (Hopefully)
New Conforming and FHA Loan Limits Now in Effect
New loan limits for both conforming (The Federal Housing Finance Administration—aka Fannie Mae and Freddie Mac) and Federal Housing Administration (FHA) went into effect January 1, 2009. Although similar in counties and cities with higher cost housing, there continue to be significant differences in the loan limits between the two programs.
New FHA Down Payment and LTV Details
Borrowers using FHA loans are now required to have a 3.5% down payment, based on the lesser of the sales price or appraised value (it went up from 3%). Good news—FHA 203(k) rehab loans still only require a 3% down payment.
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