Treasure Valley Real Estate


FHA loan limits in Fall of 2011 and bounced around a bit.  FHA announced in September the FHA loan limit would be $271,050 through December 31, 2012.  Shortly after that (early December) they decided that they would revert to the maximum loan limits previously in effect to October 1, 2011, which is $303,750 in Ada and Canyon County.  So for FHA loans with Case Numbers Assigned on or after November 18, 2011, FHA has reverted to the maximum loan limits previously in effect to October 1, 2011 ($303,750).  If you had a case number assigned between October 1, 2011 and November 18, 2011 they must use the lower limit of $271,050.

FHA loans are utilized by many buyers because they allow a lower credit score plus a lower percent down payment compared with a conventional loan.  If you qualify for a FHA loan, you can pay as little as 3.5% down on a home.

FHA allows a score as low as 580 but because FHA doesn’t actually give out the loan themselves (they are given through approved FHA lenders), most lenders require a minimum score of 620.  Sometimes there are exceptions too.  You should talk to your lender for more information.

FHA Website:  http://www.fha.com/fha_loan_requirements.cfm

Please let me know if you need the name of a knowledgeable lender.  I have several names I could give to you.

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Buying vs. Renting.  That is a big question right now with the housing market.  Many people are so pessimistic about the outcome of the market, they are hesitant to get into home ownership.  Some analysts believe this could create a different crisis in the housing market.  One where qualified buyers are choosing to rent instead of buy because of worry about the market.  How do we address that and change their perspective on buying a home.  We have to analyze the market and area that they are looking in and calculate numbers for them.  Interest rates are historically low.  Many people in the Treasure Valley can actually purchase a home for less than what they are currently paying for rent.  Plus, homeownership offers many other benefits.  Here is an excerpt from an article written by Liz Davidson, CEO of  Financial Finesse on Forbes online:

Consider this:  A homeowner with a $1,500 monthly payment would still be writing the same check fifteen years later while prices everywhere increase around them.  In August 2011, the Consumer Price Index included a .4% increase in rents, the biggest increase since 2008, which represents an annualized increase of 4.8%.  If rents didn’t even increase that much but simply kept up with inflation at a 3.2% annual increase, a $1,500 rent payment would cost that renter nearly $900,000 over the next 30 years.  The same $1,500 payment made to their mortgage would be only $540,000 (because the payments don’t increase with inflation) and of course would end with a final payment. There might even be some real equity in the property, even with a dismal 1% growth rate over 30 years, a $300,000 property would appreciate well over $100,000 giving the homeowner an additional nest egg for retirement.

The renter, by contrast has no equity in their home, so in addition to almost $900,000 in rent in the above example, the renter would also be giving up $400,000 in retirement assets (and that’s at a growth rate of just 1%– far lower than even the lowest growth rate over a 30 year time period).   At a time when retirement is becoming much more challenging, an extra $400,000 (or likely more) can make a major difference, not to mention the impact of NOT having to pay a mortgage.  How much less would you have to save for retirement if you didn’t pay the mortgage?”

Link to full article:  http://www.forbes.com/sites/financialfinesse/2011/10/13/the-next-mortgage-crisis/

This does not take into account the tax savings and other savings of home ownership. 

Every situation is different and should be analyzed to see if home ownership is right for you.  There are some situations where it is better to rent than buy.  However, in many instances, now is the right time to jump off the fence into homeownership OR into purchasing an investment property that cash flows.