January 9, 2019
A CoreLogic Home Price Insights report indicates that home prices increased by more than five percent between November 2017 to November 2018, but the same agency indicates that home prices may slow down in 2019.
Could that be beneficial to a house hunter looking to purchase a new home with a mortgage loan?
FHA home loan limits have increased in 2019 for the second year in a row, making for an interesting borrowing environment for the first-time home buyer or any other financially qualified loan applicant who seeks an FHA mortgage.
The higher home loan limits combined with slowing home prices, with predictions of more houses available in 2019 could offer house hunters more to work with in the new year.
FHA home loans are not just available for typical suburban properties; you can purchase a condo unit, mobile home, multi-unit residence, etc.
But one of the important things to remember about FHA loans is that when it comes time to refinance, borrowers have an option with existing FHA mortgages to refinance with no FHA-required appraisal OR credit check.
With that in mind, it pays to think not just about the purchase of your new home, but also your refi options later down the road; refinance loans can help you get cash back, get into a lower mortgage payment, a lower interest rate, or out of an adjustable rate loan and into a fixed-rate mortgage.
What does it take to get approved for an FHA mortgage in 2019? Your FICO scores are only one part of the picture; FHA loans have more forgiving FICO score requirements, but your loan payment history and other patterns of responsible credit use will also factor into the lender’s decision to approve the loan.
When you go house hunting in 2019, the slowdown and/or reduction in home prices (where applicable) can be viewed in part as a market reaction to the rising trend in mortgage loan interest rates we’ve seen over several months.
Rates may trend higher, but sellers want to sell. That means working with the buyer to make the deal more attractive, and lowering the price is only one way to do that. The seller is permitted under FHA home loan rules to offer up to six percent of the sales price of the home toward approved closing costs.
So in 2019 you potentially contend not just with slowing home prices, but also with sellers who may be fully aware of what it will take to make the sale more appealing to the borrower.
Don’t neglect the option to haggle with the seller over these details, it could be a big advantage in your search for a new home.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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