FHA Loans in Maine
If you've begun to think about buying your first home, you're not alone! Due in part to the recent economic slowdown, housing prices are at their lowest in recent years, prompting many people to begin to consider homeownership for the first time. It can be an overwhelming process at times, but buying your first house is exciting and hugely rewarding! If, however, you're a bit concerned about the financial impact of making such a large purchase, you should strongly consider a Maine FHA loan, which is guarantied by the Federal Housing Administration.
FHA Loans Benefits
While the FHA doesn't actually make loans directly to consumers, it provides a guaranty to the bank who does make the actual loan. So when you receive a Maine FHA loan, your bank will have the added reassurance of the FHA guaranty, which means that the bank can be a bit more lenient with its lending practices. For instance, with a Maine FHA loan, your down payment can be as low as 3.5 percent instead of the usual twenty percent required with traditional programs. You also have the option to roll your closing costs into the loan which can save you between three and six thousand dollars at closing.
The Maine FHA loan program also makes considerations for buyers who might not have the strong credit history necessary to obtain traditional financing. If you're concerned about some debt you've acquired in recent years or if you just aren't sure you have had enough credit experience to give you a very high score, the Maine FHA loan program may just be able to provide you with financing even when traditional programs can't. If you've declared bankruptcy but have maintained perfect credit since, you could also potentially qualify for a loan.
Maine FHA Loan Limits
After you've passed the credit hurdle, check with your lender regarding current loan maximums for Maine FHA loans. Each year, the FHA sets a baseline maximum for loans and then adjusts it for high cost of living areas. For most counties in Maine, you'll need to keep your house price under the 2009 baseline amount, which is $271,050 for a single family home (if you're thinking about purchasing a duplex or other multi-family dwelling, the loan amounts increase. Please check with your lender for current limits). However, due to the higher cost of living, the limit is $337,500 in Portland, and $272,500 in Hancock County.