Delaware FHA Loans
The 2016 loan limits for FHA Loans have been released and are calculated based off the median home price for the county. Each county has a different loan limit based on the median home price for that county. 2016 FHA Loan Limits are as follows;
|New Castle County
The loan limits do not include the financing of the upfront mortgage insurance premium. So for someone buying a home in New Castle County, Delaware they could get a maximum loan amount of $379,500 plus the upfront mortgage insurance premium.
Delaware FHA Loans Income Limits
There are no income limits for FHA loans, you can make as little or as much as you want as long as you meet the Debt-to-income ratios allowable by FHA. The ratios are 31% of your gross income can be used toward your housing expense and 43% of your gross income can be used for your housing plus all your other expenses listed on your credit report. You can push the ratios higher if you have some compensating factors such as good credit or reserve money. The highest housing expense ratio is 46.9% and the highest total debt to income ratio allowed on a FHA loan is 56.9%
Delaware FHA Loans Down Payment Requirements for 2016
FHA loans require you to invest 3.5% in the transaction as of January 1, 2009. This 3.5% must be used toward down payment and not closing costs or pre-paid items. The maximum loan to value for an FHA loan for a purchase in Delaware is 96.50%. If you are using an FHA loan to refinance for a change in rate and term then you can go up to a maximum of 97.75%. If you already have an FHA loan and want to do an FHA Streamline Refinance to change your rate and term, then you don’t need an appraisal but you can’t take any cash out. If you wish to do a cash-out refinance then you are limited to a 85% loan to value. If your credit score is below 580 then FHA requires a 10% down payment on purchase transactions for maximum LTV is 90% on Delaware FHA Loans.
FHA Loans require that the borrower pay an upfront mortgage insurance premium that may be financed into the loan and FHA loans also require a monthly mortgage insurance premium that is part of the monthly mortgage payment. As of January 21, 2015 the upfront mortgage insurance premium on Delaware FHA Loans is 1.75% and the monthly mortgage insurance premium is calculated using a yearly premium amount of 0.85% for loans with 95% or higher loan to value for 30 year FHA mortgages. It is 0.80% on 30 year mortgages with 5% or more down payment.
FHA Mortgage insurance is required to part of the monthly mortgage payment for the full 30 years of a Delaware FHA Loan if less than 10% is put down. If you put at least 10% down on a FHA Loan then you are only required to have the mortgage insurance for 11 years. A unique feature of FHA mortgage insurance is that it does get re-calculated every 12 payments so will go down every year.
John R. Thomas
Certified Mortgage Planner – NMLS – 38783
Primary Residential Mortgage, Inc.
248 E Chestnut Hill Rd
Newark, DE 19713