On Tuesday, I shared my Conventional Financing Qualification Chart to give Bay Area home buyers with 20% down payment a ballpark estimate of what size mortgage they can afford. Today, I will share a similar chart with you for buyers who want to take advantage of the FHA financing program. Remember, the FHA program only requires 3.5% down payment and does allow for sellers to pick up some of the costs associated with the loan. It can be a good option for those buyers who do not have 20% to put down but can afford the monthly payment on a San Mateo home.
Just as with the Conventional Financing Qualification Chart, the FHA Financing Qualification Chart will give you a general idea of the purchase price you can afford with just your gross annual income. As with the last chart, this chart also comes with some assumptions. To make it simple, I have assumed you have $0 debt and have enough savings to put a 3.5% down payment on the property.
Great News About FHA
The great news about the FHA program is that there are much more lenient standards when it comes to credit score, down payment and reserves which puts many more home buyers into the San Mateo real estate market. Buyers who do not qualify for conventional financing often qualify for the FHA program.
Why All the Colors?
FHA has limits on the amount they will lend on any one given property. They put limits on the purchase price based on the number of units the property has. The 2009 San Mateo County FHA Loan Limits are:
- 1 Unit: $625,500
- 2 Units: $800,775
- 3 Units: $967,950
- 4 Units: $1,202,925
What Does This Mean?
Basically, if you want to take advantage of the FHA loan program, you can only have a loan amount up to these limits. You are welcome to put more money down so your loan amount falls within the limits, however, another loan program may work better for you. If you have a question as to which program is right for you? Call or email me and I will help you make an informed decision.
As with conventional financing, the interest rate can affect what you can afford. The lower the interest rate, the less you can afford.
How Much Can You Afford? Find Out Free
With San Mateo home prices dropping, now is a great time to buy your first home or trade up to a home that you couldn’t afford two years ago when the market was booming. If you are interested in learning exactly how much home you can afford so you can get out there and start looking for a home, contact me for a no obligation in person or telephone appointment. I do not have to run your credit score in order to give you an idea of how much you can afford given your current financial situation.
Other Posts You May Enjoy
- What Mortgage Can I Afford?
- If My Financials Aren’t Perfect, I Won’t Get a Loan
- 2009 Bay Area Conforming Loan Limits
- Popping and Locking – Interest Rate Style
- The CIA of Lending Series
Enjoyed this Post? Why Not Subscribe?
If you have enjoyed San Mateo Mortgage Blog, please subscribe to our RSS feed.
Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.
Related posts:
- Monthly Mortgage Payment Estimator
- How Mortgage Interest Rates Affect Your Monthly Payment
- How does the CalSTRS 80/17 Home Loan Program Differ from Conventional Financing?
- 9 Questions to Ask When Financing a Condo with FHA
- Using FHA Financing to Finance a San Mateo Condo? Get Your Lender Involved Early
