New Mexico FHA Loans and Refinancing
The real estate market in New Mexico is beginning to regain a bit of ground after a few years of very low prices and not much house turnover. This is great news for sellers who have had their house on the market, but what about buyers? The truth is that if you're thinking about buying a house, you'll most likely want to get it done before the market recovers substantially since, as the market recovers, housing prices will increase and sellers will become less willing to negotiate. But what if you haven't been able to save up the money necessary for a down payment? That's where a New Mexico FHA loan can be helpful.
New Mexico FHA loans are a product of the Federal Housing Administration and are targeted towards first time homebuyers who might not have a large down payment or a perfect credit score. In fact, while most bank loans require 20% of the purchase price as a down payment, the New Mexico FHA loan program only requires 3.5% of the purchase price. The FHA also allows buyers to roll the closing costs into the loan which can save an additional $6,000 on average up front.
Why choose an FHA Loan?
The majority of buyers are concerned about their credit scores when they apply for a loan since that's the largest factor in determining if they'll receive a loan in the first place and also what rate they'll receive. New Mexico FHA loans have a relaxed credit standard due in part to the fact that FHA guaranties each loan issued by the program with the bank who executes the loan, allowing the bank to be more lenient with borrowers' credit scores.
Arkansas FHA Loan Benefits
If you think that the New Mexico FHA loan program is for you, check with your lender for current qualification standards and for the maximum loan amount in your area. In most cases, the 2009 limit for a New Mexico FHA loan is $271,050 for a single family home, but in Los Alamos for example, the current limit is $380,650 due to a higher cost of living. Ask your lender for the current limit for your situation, particularly if you're considering the purchase of a multi-family dwelling since the limits are different depending on the number of units the dwelling has.