Ascent Home Loans

The Senate has recently passed Senate Bill S 2338 which changes dramatically the structure of the standard FHA program.  In recent years FHA programs have not been used to any extent here in California due to the median home prices being much higher than the $362,790 FHA loan limit established for most of the state.  With the passing of the above bill, loan limits will be raised to the Fannie Mae and Freddie Mac conforming loan limits of $417,000.  Along with those lines, the bill will also reduce the required 3% down payment from the borrower down to 1.5%.  This change alone will give many families the extra help they needed in purchasing a home.

With the increase in the loan limits to $417,000, this change will help those that need to refinance now: borrowers with adjustable rate mortgages with interest rates that have skyrocketed over the past months, or mortgages that are about to reset to much higher rates.  Currently many borrowers with adjustable rate mortgages are waiting to see if  FHASecure is the better way to go. Although some lenders have established FHASecure programs, most have not and those that have are charging roughly 1/2% to 3/4% higher interest rates than standard FHA programs. If you are currently up to date with your payments, the standard FHA program is the best way for a borrower to refinance in today’s market.

Remember these key FHA Highlights:

Lower Down Payment: Currently FHA requires a 3% down payment which can come from several sources. However, once the the bill is signed by the President, the required down payment will be lowered to 1.5%.

Competitive Interest Rates: FHA loans have always been competitive with other conforming loan pricing.

Qualifying for an FHA Loan: It is much easier to qualify for an FHA loan than most people think.  Because the federal government is backing the FHA loan, those with less than perfect credit or have extenuating circumstances may still get approved.  Do not assume your situation will cause you to not be approved.

Now is the time to start thinking about refinancing into an FHA loan.  Once the bill is signed by the President, new doors will be opened for both current homeowners to refinance and first-time home-buyers to purchase.