FHA 3.5% Down Mortgages

FHA mortgages are the most popular for first time home buyers or borrowers with not a lot of cash but high incomes. The requirement is 3.5% down currently on mortgage limits in Contra Costa & Alameda counties up to $729,000. There is rumor that this limit will be lowered t $650,000 in the Fall of 2011. In the meantime, FHA financing is a great way to purchase a home.

Sellers can contribute up to 6% toward the buyer’s closing costs. Make a full price offer or close to the seller’s asking price is an incentive for the seller to contribute towards your closing costs. In some cases if you qualify for over the asking price and the property will appraise, then this is another option.

FHA rates vary according to market conditions and regardless of the loan amount MI insurance is required on the life of the loan. With most conventional loans requiring a minimum of 10% down, an FHA loan makes sense if you have limited funds.

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