These have long been a favorite of first-time buyers and those with low- to middle-incomes.

Is FHA still beneficial if I’m purchasing a more expensive home?

The FHA uses a system of loan limits that vary by county. The average loan limit is $271,050 for a single-family home and $521,250 for a four-family home. But for more high-end real estate markets, such as those found around major cities, the loan limit can reach as high as $729,750 for a single-family home to $1,403,400 for a four-family home. Even for borrowers wishing to purchase a more expensive home, a FHA loan is still one of the most rewarding loan programs available. With a FHA loan, eligible borrowers will find benefits they would rarely receive with a conventional loan such as:

-Competitive interest rates

-A down payment of only 3.5%

-Regulated closing costs

-Lenient debt to income ratios

What are basic Tennessee FHA loan requirements?

Many borrowers find FHA loans are easier to obtain than conventional loans. They also come with competitive rates. While the FHA insures a portion of each loan, it doesn’t actually issue them. Borrowers will have to meet the conditions and requirements of their lender as well as those set forth by the FHA. In general, the program expects:

-2 years of steady employment without income decreasing

-a minimum credit score of 620

-a clean credit report two years after a foreclosure or after filing for bankruptcy

What other options do I have for financing?

When a borrower wishes to purchase a home for greater than the FHA loan limit in their area, they  have the option to use the FHA loan in conjunction with other financing options.

Contributed by:  Michael Blumreich

• Up front mortgage insurance premium increased to 2.25
• 10% down payment for buyers with a FICO of less than 580.
• Seller concessions reduced from 6% to 3%

No specific date on when these changes go into effect, just sometime in the spring.  Stay tuned!

Woo Hoo!!!!!  THDA just announced they are lowering their interest rate to 5% effective Tuesday, October 20

Great Advantage is 5.3% (2% assistance)

Great Start is 5.6% (4% assistance)

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Nationwide, the average origination and title fees on a $200,000 mortgage this year totaled $2,732, according to Bankrate’s annual survey of closing costs. The fees in the survey don’t include taxes, insurance or prepaid items such as prorated interest or homeowner association dues.
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So how did Tennessee do, and where did our state rank nationally?

Tennessee ranked 12th highest in the nation (a significant jump from our 24th place ranking in 2008) with total average costs of $2,901 … $169 higher than the national average.

1. Know what you can afford.
2. Shop around – compare loans from lenders and brokers.
3. Understand loan prices and fees.
4. Know the risks and benefits of loan options.
5. Get advice from trusted sources.

Sound advice!!

Interest rates compliments of: