Will FHA Loan Limits Increase in 2020?
FHA loans have already been set for 2020 and in most parts of the country they have indeed increased! To check on the loan limits for 1-4 unit properties in your specific county, click on this link: https://entp.hud.gov/idapp/html/hicostlook.cfm
What Credit Score is Needed to Buy a House in Maryland?
FHA provides the most flexible qualification terms to purchase a home in Maryland or any other state. FHA guidelines allow for anyone to purchase a home with a credit score as low as 500, however if your credit score is below 580, then you are required to put down a minimum of 10% as your down payment, versus if your credit score is 580 or above, the minimum required down payment is only 3.5% of the purchase price. The lower your credit score however, the more difficult it may be to qualify but FHA doesn’t judge your credit score as harshly as other types of loans
How Much are Closing Costs in MD?
According to Zillow.com, the median home value in the state of Maryland in 2019 was $308,041, which is fantastic! With higher home values, come higher costs however, and a general rule of thumb when you are purchasing a home is to assume that your closing costs will run you about 2% to 3% of your purchase price and if you are setting up an escrow account to pay for your property taxes and homeowners insurance, a requirement for all FHA loans, that will run you another 2% to 3% of your purchase price. On most properties that you purchase in Maryland, the closing costs run between 4% to 5% of the purchase price.
FHA Debt Assistance
In 2019, FHA reduced the loan-to-value maximum on all “cash-out” refinances to 80% of the appraised value. Cash-out refers to any loan that you take out on your property whereby you are accessing equity above and beyond the customary closing costs to either consolidate debt or receive cash-in-hand when your loan closes and funds. Cash-out refinances are a great tool to utilize in order to reduce your overall monthly debt burdens by paying off high interest rate credit cards, installment loans, or any other type of loan that you might have.
Consolidating Debt Into First Time Mortgage
FHA mortgages allow you to consolidate most other debt that you may be carrying by increasing your loan amount to pay off that debt during a refinance. This type of refinance is referred to as a “cash-out” refinance. FHA allows you to consolidate a 2nd mortgage, a Home Equity Line of Credit, installment loans, car loans, school loans, credit cards, and most other types of debt. Your loan amount and your loan-to-value are restricted to your specific counties loan limits and an 80% loan-to-value based on the appraised value of your home.
Is it Hard to Get a FHA Loan?
FHA loans provide some of the most flexible terms and qualification standards that you’ll find in the mortgage market. Most FHA lenders allow you to have a minimum of a 580 credit score and a debt-to-income ratio higher than Conventional loans. Additionally, you can receive up to 6% back from the seller of any property to go towards paying for your closing costs and prepaid escrows, and you can also have a family member give you a “Gift” of funds for your entire required down payment. This doesn’t mean that everyone who applies for an FHA loan will be approved, but it is a very popular choice for people who either don’t have the best credit or who want the lowest down payment possible, or a combination of both.
What is the HOPE Program?
The HOPE program, which stands for: HOMEOWNERSHIP AND OPPORTUNITY FOR PEOPLE EVERYWHERE, helps low-income people buy public housing units by providing funds that nonprofit organizations, resident groups, and other eligible grantees can use to develop and implement homeownership programs. Grantees of these funds include public housing authorities, resident management corporations, resident councils, nonprofit organizations, housing cooperatives, and public entities. The ultimate goal is to for these grantees to provide low-income families the ability to become homeowners. The last HOPE grantee was awarded in 1994 and applications are no longer being accepted at this time.
Consolidate Debt by Refinancing Your Mortgage
In addition to being able to consolidate a 2nd mortgage, Home Equity Line of Credit, revolving monthly debt such as credit cards, installment loans, and so forth, consolidating your debt and taking out a new 30 year loan, sometimes with a lower interest rate than what you currently have, can be incredibly beneficial in lowering your monthly debt obligations. By freeing up monthly cash, homeowners can begin to save money for future unforseen costs that occur with any property.
How Can Refinancing Help Me Consolidate My High-interest Debt?
Refinancing high-interest credit card debt can significantly reduce your overall monthly debt by paying off the debt and adding it to your mortgage loan balance. Your mortgage loan is typically spread out over 15 to 30 years, so if you are like the average American who holds $8,000 in credit card debt, with a monthly interest payment in the hundreds of dollars per month, paying off that debt and rolling it into your mortgage can save you hundreds of dollars.