Home Purchase Loan Guidelines in 2011

By Michael Winston • March 14th, 2011

When it comes to buying a house, selecting the right mortgage loan will be critical to being able to afford the monthly payments on your home for the coming years.  There are certain things you need to know about VA loan requirements, conforming loan amounts, jumbo loan amounts, and FHA loan limits.  Issues regarding down-payments with FHA home loans, conventional loans, and VA loans will also be addressed here.  The fact that there is a trend more lenders to require higher credit scores is something you will find important, as will the currently low mortgage rates. Many first time homebuyers with bad credit have been blessed getting a second chance with a FHA loan. The benefit of the First Time Homebuyer Tax Credit has disappeared as Congress has chosen not to renew these tax incentives for 2011.

Understand Requirements, Loan Limits and Down-Payments for Home Purchase Loans

If you want a certain kind of loan, you must qualify before you can have hopes of being approved.  VA loan requirements indicate that you must be a veteran of the armed services (after serving for at least four years), that you or your spouse must occupy the home soon after obtaining your mortgage approval, and that you must make enough money to justify owning and paying for a home.  In general, no matter what kind of mortgage you are seeking, there is a trend more mortgage lenders to require higher credit scores to be accepted for low mortgage rates.

If you are interested in obtaining an FHA loan, you need to know that the FHA mortgage limits have not changed.  For one-unit dwellings in average areas, the limit is $271,050.  Higher cost areas are limited to loans of $729,750.  FHA loan limits of $1,094,625 exist for Alaska, Hawaii, Guam and the Virgin Islands.  Conforming loan amounts of up to $417,000 for a single-family dwelling can be obtained if you fit within the guidelines set forth by Fannie Mae and Freddie Mac.  You begin calling them jumbo loan amounts once you take out a loan for more than $417,000.

Along with qualifications and loan limits, you must also consider down-payment requirements when choosing the right mortgage for you.  The down-payment requirement for FHA mortgage is 3.5%.  The down-payment requirement for conventional loan is typically about 10% to 20%.  Best of all, there is no down-payment required with VA loans, but you do need to be a veteran to qualify.  These down-payment requirements will become another aspect of making your decision between VA home loans, FHA loans, and conventional loans.  In 2011, while there is a trend more lenders to require higher credit scores, you can still achieve low mortgage rates if you are shopping in the right places.

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