A large loan with very little money down is still available. FHA has recently increased their maximum loan amounts. In the upstate Western New York market, the new maximum loan amount is now $271,050. This was increased from $208,000. In addition, the down payment still remains at 2.25%.
One misconception is that an FHA mortgage is only available to first time home buyers. This is not true. The only requirement is that you may not hold 2 FHA mortgages at one time. This will allow many buyers to upscale from their previous home into something larger and accomplish it with our busting their bank account. On a $250,000 the down payment is only $5625. On a conventional mortgage, the minimum down payment would be 5% or $12,500.
Another benefit with FHA is they still allow up to 6% of seller concessions as long as the borrower has contributed into the transaction a total of 3% of the purchase price. Seller concessions are the ability to finance a portion or all of your closing costs on top of your mortgage. On the above example, the buyer could then roll in to their mortgage up to $15,000 (6%) of closing costs and prepaid expenses. When all is said and done, the buyer can purchase this home with as little as $7500. Who said it is getting more difficult for homeowners to purchase their dream home?
