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New Loan Limits For DFW Metroplex

New Loan Limits For DFW Metroplex

loan limits

New loan limits have been announced for the major counties in the Dallas-Fort Worth Metroplex, including Tarrant, Denton, Dallas and Collin.

For VA and Conventional loans, the new loan limit is $424,100 and for FHA loans, the new loan limit is $362,500.

Interest Rates

If you are looking at purchasing a home, interest rates have steadily risen since the election. And as rates continue to go up, your buying power diminishes. Now, would be a good time to get pre-qualified and start looking so you can lock in a lower interest rate before they rise again.

Down Payment

The good news for FHA and Conventional loans is that you don’t need a 20% down payment. For FHA loans, you can have a down payment of 3.5% of the sales price. For conventional loans, you can have 5% down. And, if you are a first time home buyer, there are some 3% down conventional products.

Jumbo loans are for mortgages above $424,100. While most jumbo loans require a 20% down payment, there are some products with a 10% down payment.

Mortgage Insurance Premiums

LeAnn Smiley is the team loan originator at the Joe New Team – PrimeLending. She says not to be nervous if you are required to have a monthly mortgage insurance premium added to your mortgage. These will happen whenever you don’t have a 20% down payment. She said it’s not a bad thing! It enables you to buy a house without having a bigger down payment. Also, sometimes lenders can even offer a better and lower interest rate with it added on because it adds more protection for them.

There’s even better news for low-to moderate-income buyers! The Federal Housing Administration (FHA) is set to cut mortgage insurance premiums later in January. The FHA will reduce the annual mortgage insurance premium most FHA borrowers pay by a quarter of a percentage point starting Jan. 27. Mortgage premiums will be a drop from 0.85 percent to 0.6 percent, according to the National Association of Realtors.

UPDATE AS OF 1/20/17: The HUD announced it is indefinitely suspending the reduction of FHA mortgage insurance premiums.

“Every time we cut the cost of mortgage insurance it means more borrowers meet the debt-to-income ratio required to purchase a home,” said William E. Brown, National Association of Realtors president, said.

According to HUD, the rate cut also means new borrowers who take out FHA loans will save an average of $500 this year.

Furthermore, Julian Castro, the U.S. Housing and Urban Development (HUD) Secretary, said that this action, “comes at the right time for consumers who are facing higher credit costs as mortgage interest rates are increasing.”

Do you have any questions about loans and interest rates or down payments for 2017? Please don’t hesitate to give us a call at 817-481-8890 or send us an email. We’d be happy to help or refer you to one of our excellent lending partners.