Maximum FHA Loan Limit
The maximum loan amount for an FHA Loan is often less than for a conventional mortgage. Depending on the purchase price you are considering, you may not be able to borrower as much money as you need through FHA financing. The maximum FHA Loan limit is determined by the county the property is located in.
Click Here to Search for the Maximum FHA Loan Limit by County.
Can I Qualify for a Conventional Mortgage?
Another consideration when determining whether an FHA loan or a Conventional Mortgage is right for you is whether you can qualify for a conventional mortgage.
Total Monthly Payment and Closing Costs
FHA Loans typically offer equivalent to better interest rates than similar credit qualifying conventional mortgages. But, all FHA Loans will have Mortgage Insurance, which often make traditional conventional mortgages preferable to FHA loans if you can qualify for a conventional loan as the total monthly payment on an FHA loan will be higher than the corresponding monthly payment on a conventional mortgage.
What is FHA Mortgage Insurance?
Mortgage Insurance is an insurance policy lenders are required to take out on FHA loans to offset the increased risk of default associated with these loans.
All FHA Loans contain 2 types of Mortgage Insurance:
Purchase Price = $250,000
Minimum Down Payment of 3.5% = $8,750
Loan Amount = $241,250
Upfront MIP of 1.7% of Loan Amount = $4,101.25
Total Loan Amount = Loan Amount + Upfront MIP = $245,351.25
FHA Property & Appraisal Requirements & Flips
For example, if you enter a contract on a property and complete an FHA appraisal, and then cancel the contract for any reason (low appraisal, loan is denied, failed inspection, etc.), any future borrower that decides to buy the property that applies for an FHA Loan will have to use the original appraisal for a period of _____ days before it expires.
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