VA Loans

NewsVA Loans

FHA and VA loan limits will increase in 2018

FHFA Raises Conforming Loan Limit to $453k

Loan limits were frozen in place at $417,000 for 10 long years after the housing bust, but were finally raised on January 1 of 2017.  Rapidly increasing home prices have now allowed the Federal Housing Finance Agency (FHFA) to increase them again for 2018.

The maximum conforming loan limits for mortgages eligible to be acquired by Fannie Mae and Freddie Mac (the GSEs) in most of the U.S. starting on January 1 will be $453,100, an increase from $424,100 in 2017.  The Veterans Administration and FHA are expected to follow suit, raising limits for their own loans.

The Housing and Economic Recovery Act (HERA) requires that the baseline conforming loan limit for the GSEs be adjusted each year to reflect the change in the average U.S. home price.  FHFA published its third quarter House Price Index (HPI) earlier today showing the average U.S. home value has increased by 6.8 percent since the third quarter of 2016. Therefore, the baseline maximum conforming loan limit has been increased by 6.8 percent as well.

Not every borrower will be subject to the baseline limit. Where the local median home value is more than 115 percent of that limit, HERA allows higher limits, with a ceiling of 150 percent of the baseline limit. This will make the new ceiling in high-cost areas $679,650, that is 150 percent of $453,100.  Some areas will have limits falling between those two numbers, as shown in the heat map below and in a complete county-by-county list of loan limits here.

There are additional provisions allowing for different limits in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.  In these areas, the baseline loan limit will be $679,650 for one-unit properties, but FHFA says some specific locations may have even higher limits.

Properties with multiple units will have baseline limits of $580,150 for two-family properties, $701,250 for three units, and $871,450 for four units. High cost areas will have maximum limits of $870,225, $1,051,875, and $1,307,175 respectively.

Second mortgage loan limits have been raised to $225,550 with a limit of $339,825 in Alaska, Guam, Hawaii and the Virgin Islands.

To discuss your confidential loan scenario please schedule an appointment with Mitch Lichterman by CLICK HERE.

Phone:  310-478-4999
Email:mitch@targetrate.com
Skype: mitch.lichterman

MortgageReal EstateVA Loans

Give Yourself a Financial Break as a Military Veteran

Fotolia_114124974_Subscription_Monthly_M-300x200

Take advantage of special home loans if you’re currently serving in the military or have served in the military. You could qualify for mortgage cost savings as an active duty member or as a reservist. Specific mortgage cost savings that you could qualify for include a zero down payment, low interest rates, a cap on how much you have to contribute to closing costs and foreclosure protection. However, serving in the military isn’t always a home loan savings slam dunk. Preparation and the right documents are important. So too are the following actions.Prepare to Meet and Negotiate with Mortgage LendersReview your credit reports with the three major credit bureaus, TransUnion, Experian and Equifax. Clear up discrepancies, including erroneous charges, collections and other late payments that you previously resolved. Pay down debt. Set a goal to pay off credit cards, especially high interest credit cards. Avoid opening new credit card accounts.Lenders are going to take a pulse on your overall financial health. High debts could indicate that you’d struggle to pay your mortgage should even one event change in your life. High interest credit cards could also lend the appearance that your credit isn’t good enough for you to qualify for low interest credit cards, so again, pay off high interest credit cards early.If you receive a housing allowance, provide this information to lenders. A housing allowance is a benefit that active duty military members receive but may overlook when applying for a home loan. Should your spouse and you both serve in the military, the combined amount of your monthly housing allowance should be higher than if you were single. Contact your military human resources department if you’re unsure how much you receive in a monthly housing allowance.Get your financial records in order, meaning that you get paper copies of bank or credit union statements, a copy of your Statement of Service, DD-214 (if you’re retired), paystubs, tax returns and paperwork on existing loans including any small business loans you took out to start a company. Before you meet with lenders, determine how much house you can afford. Take advantage of online mortgage calculators.Factors to include in your calculations when you’re determining how much house you can afford are monthly homeowner’s insurance premiums, homeowner’s association fees (if they apply), the down payment you’re going to put on your new home, property taxes, repairs, closing costs and inspection fees. If you’re thinking about buying an older home, consider increasing the amount you’ll spend on repairs annually.Documentation together, it’s time to start the loan pre-approval process. Meet with lenders who are approved by the Veterans Administration to offer mortgage cost savings to retirees, reservists and active duty members. Do this before you meet with realtors, as getting pre-approved for a loan can yield you greater mortgage cost savings. Use your military housing allowance to prove your loan repayment power. Prepare to negotiate with lenders to get the best interest rates and mortgage premiums that you can.In addition to your financial records, other factors that lenders will review about you include your marital status and your length of service. Lenders may focus on whether you just joined the military, are soon to be discharged or if your military job requires you to relocate often.