FHA Raises the Roof – New Loan Limits For Home Buyers
August 15th, 2009
First and foremost, a FHA loan only requires a 3% contribution out of pocket from the buyer. And, FHA allows the seller to pay up to 6% of closing costs and pre-paid costs (“pre-paid costs” are the money held in reserves to pay for your taxes, insurance and per diem interest). Look at it this way. If you wanted to buy a $250,000 home now, new home mortgage loans you would only need to have $7500 into the deal if you could negotiate with the seller to pay the remainder of the closing costs and pre-paid items. Lenders that specialize in bad credit refinancing are called sub prime lenders or high risk lenders.
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