FHA changes their mortgage limits yearly. Buyers must know what they are and how they could change. For this year, in many regions, the limits have increased to accommodate the changing market. Here is an overview of the FHA maximum mortgage amounts for Watertown MA.
Understanding FHA Mortgage Limits
Mortgage limits reflect the most that may be obtained on an FHA mortgage. The mortgage amount is not equivalent to the sales price. For instance, if you buy a house for $ 450,000.00 and are submitting 3.5 percent down, then the mortgage amount is $ 434,250.00.
How FHA Mortgage Limits are Computed
FHA mortgage limits vary by county and city. Median real estate sale prices are compared to the national conforming mortgage limits. Conforming mortgages meet Freddie Mac and Fannie Mae rules and may be transferred in the secondary mortgage market. FHA calculates 65 percent of the limit for conforming mortgages and uses that as their floor for low cost markets. Low cost markets are areas where 115% of the median real estate sales price is lower than 65% of the conforming mortgage limit. For high cost communities, it may reach 150% of the national conforming mortgage limit. High end areas are those where 115% of the median real estate value is higher than 150% of national conforming mortgage limits.
FHA Maximum Mortgage Amounts For Watertown MA
The mortgage range is $271,050 and $625,500. Thus, in no area will the limit go less than $271,500 or go above $625,500. This range is the same as the figures from 2014, but a majority of markets are somewhere in between this range and will notice a difference for this year. There are also adjustments for single family and multi-family homes. In most active markets, the loan limits changed quite a bit this year. This will enable home buyers to better compete for homes and elevate their purchase price.
Middlesex County, Single Family 598,000
Middlesex County, Two-Family 765,550
Middlesex County, Three-Family 925,350
Particular mortgage limits for your area are available on the HUD website at https://entp.hud.gov/idapp/html/hicostlook.cfm.
Importance of Understanding FHA Maximum Mortgage Amounts For Watertown MA
It is necessary to know the maximum purchase price throughout the process. Selecting a home above the limit will lead to a larger down payment or require you to research another mortgage program. For instance, if the mortgage limit is $ 350,000.00 and you have a 3.5 percent down payment, then your price limit is $ 362,694.30. Buying a house for $ 369,948.19 leads to a $ 7,253.89 gap. You would need to come up with that difference. If you do not have these additional funds, this can not be feasible. Remember that the maximum price limit might not be exactly the same for every city that you are considering. It is a good idea to know this ahead of time.