Tuesday, October 21, 2008

Interview the Expert: FHA Loans

Today begins a periodic series of posts spotlighting an interview with a local expert on topics related to the housing market. First up is Jeannie Bolger of Suburban Mortgage. Jeannie's been in the mortgage game for 20+ years and in that time has seen it all. She specializes in first time homebuyers, does a little credit counseling prior to purchase for those in need, and is an expert on FHA loans.

Contact Jeannie:

Jeannie Bolger
Senior Loan Officer
Nova Home Loans
2525 E Camelback Rd #600
Phoenix, AZ 85016
P: 602/ 550-8674
F: 602/ 224-4842

Interview the Expert
Jeannie Bolger on FHA LOANS

First, FHA loans are great options for first time homebuyers, those with no credit rating or poor credit, and those needing down payment assistance. Interest rates are competitive and the loan application process is similar to 'regular' mortgage applications.

The FHA program is very forgiving when it comes to medical debt and student loans, and in some instances will ignore these items on your credit report altogether. FHA also allows those buyers who have  literally no credit history to establish credit (for the purposes of the mortgage) by showing a history of on-time payments to utilities, cell phone companies, car insurance companies, and the like.

There's a TON more information available, so please don't hesitate to contact me or reach out to Jeannie! On with the interview....


Q: Is it true you must be a first time buyer to get an FHA loan?

A: No. However, FHA rules allow homeowners to have only 1 high ratio FHA loan at one time. If a 2nd home is desired, at least one of them must be at a 70% or lower LTV (loan to value). Some exceptions apply, so you should check with your lender.

Q: Are FHA loans still ruling the marketplace?

A: Yes. For loans under $357,000, FHA is king.

Q: What are current FHA loan limits?

A: In Maricopa County, the current FHA loan limit is $346,250. That's the max amount buyers can borrow, for now, and represents a temporary increase in the upper limit. We'll have to wait and see what Congress does to these limits in the future.

(NorthPhoenixAgent Note: The max FHA loan amount is $346,250. With a 3.5% down payment, this loan amount translates into a $357,000 purchase price. Buyers with more money to put towards the down payment can shop at a higher price point, put more down and still get a max FHA loan of $346,250.)

Q: Is it true that down payment requirements are getting stricter in the future?

A: Yes. For now,  But, that ruling only effects mortgages assigned a case number after January 1. So, you can write a purchase offer on December 20, with a closing date of January 15, and still put only 3.0% down. (NorthPhoenixAgent Note: the mortgage officer orders your case number, buyers need only be concerned about completing the application paperwork).

Take Home Lesson! Planning on using an FHA loan to buy? Pick a property and make the loan application before the end of the year! Wait and you'll have to have a bigger down payment.

Q: What are the down payment requirements for investor puchases?

A: For the most part, investor loans right now require 25% down payment. If the buyer is a repeat investor and they plan to rent out the property, we can offset their future loan payment with expected future rent payments, after completing an appraisal and Rental Analysis Schedule. Investors buying their first rental property must qualify for the purchase without taking future rent into consideration.

Q: Can foreign nationals still get purchase loans for Arizona property?

A: We have a program for Canadian buyers which requires 25% down, it must be a 2nd home, full documentation is required and we pull an International Credit Report. Unfortunately, I have nothing right now for other foreign nationals.

Q: Tricky question: will the US Presidential election have any immediate affect on the housing market?

A: Presidential elections always affect the market, and therefore affect everybody. Now that we're 2 weeks away from picking our next president a lot will happen and once the new Presdient is elected the markets will react in a positive or negative way... it's a waiting game. Who has the Magic Crystal Ball??

[polldaddy poll=1027372]