How A lot Will My FHA Residence Mortgage Be?
How Much Will My FHA Home Loan Be? This is a question many borrowers want to know, and the answer can be more complicated than just taking the home selling price and doing the math.
The maximum FHA home loan amounts are determined by factors including the maximum FHA loan guarantee for the housing market you are buying the home in, your loan history, the size of your down payment, and more.
The final amount of your FHA mortgage loan will be affected by your down payment, the FHA loan limit in your area, and other factors.
FHA home loan limits
FHA home loan limits are not the same in all housing markets. Some parts of the country are considered low cost areas and have lower FHA loan guarantee limits than “typical” housing markets, and high cost areas such as Hawaii, Guam, and elsewhere have higher limits.
You can first look up the FHA loan limits in your area to see what is possible, but know that the FHA loan limits are not calculated using factors such as the size of the FHA Pre-Mortgage Insurance Premium (UFMIP). The expenses related to your mortgage loan that will end up being financed are added to the loan after calculating the maximum mortgage amount.
In other words, the FHA’s maximum mortgage guarantee limits will not affect your ability to fund UFMIP. But the FHA loan guarantee limit is one factor that definitely determines how much home loan you can apply for.
FHA mortgage loan rules for down payments
Your maximum loan amount will be affected by the amount of down payment you make. Paying an amount greater than the 3.5% minimum will reduce the total amount of your loan, which can save you money due to the lower principal and interest calculation of the mortgage over the life of the loan.
Some borrowers have the option to pay a larger deposit while others may have to pay a larger deposit due to credit problems. A higher down payment can affect the total amount of your maximum mortgage, but it can also affect the amount of your monthly mortgage payments.
Some FHA mortgages require more discount regardless of credit problems or other factors – a home purchase loan with an “interest identity” where one party to the transaction is a relative or someone with a business relationship with the borrower. Identity of interest situations, the maximum loan is limited to 85% of the adjusted value of the house.
This means that a deposit of at least 15% would be required. In such cases, the maximum FHA loan amount is 85% of the adjusted value of the property, with the borrower paying the remaining 15%.
FHA loans for new purchases do not allow cashback cash
Some borrowers want to know if they can apply for more FHA home loans than is required to buy the home and if they can pay any allowable expenses or funded costs. The FHA loan rules do not allow repayment to the borrower for a new home loan purchase or refinance with no payoff except in the form of legitimate refunds for prepaid funds for things that are later financed in the loan amount.
Your FHA home loan cannot be used as a personal loan in any way – all loan proceeds must be used in a lender approved and FHA approved manner. The borrower is not allowed to receive cashback on a new FHA home loan in the same way that those applying for FHA cash-out refinance receive cashback.
There are many factors that will help the lender determine the maximum loan amount for your FHA mortgage. Talk to a loan officer today to learn how this amount can be calculated for your specific home loan needs.