Question:

Should I get an FHA insured mortgage if I live in California?

Answer:

Well, currently FHA insured mortgage loans make not more than 6% of all loan originations, while in 1980s FHA had a share of over 22% of originated mortgages. The current percentage of FHA mortgage share makes the whole idea of the agency less relevant, as few borrowers are benefitting from FHA insured mortgages.

Especially for California, New York, Connecticut, Massachusetts and other high-cost areas, you are not entitled to any benefit as the FHA loan limit is around $362,000, calculated as 87% of the maximum Freddie Mac loan of $417,000 for high-cost areas. Since the average cost of a single unit property in Orange County, CA can very well exceed $400,000 and even go over $600,000, the answer is no, you cannot yet benefit directly from an FHA insured mortgage in California, but the Senate is working on increasing FHA loan limits and especially in some high cost areas they are expected to top and exceed $700,000; still, FHA loan limits have not yet been adjusted yet.

The FHA insured mortgage loans are on their way to become a good alternative to all the subprime lenders loans who flooded the market extending unbearably high amount loans to people who should never even applied for those.

Recommended helpful present and future homeowners links:
Why: Refinance to a fixed rate loan while mortgage rates are still low.
Link:
Why: Because FHA loans are insured by the US Federal Government they have very competitive interest rates and are easier to qualify.
Link:
Why: Know and protect your credit report and score.
Link: See All 3 National Credit Scores & 3 Reports Instantly, Online & Free
Link this QnA Print del.icio.us Digg
Was this Mortgage QnA helpful?
Not at all
  • Currently 3/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
 Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA:

Common misspellings: mortage and morgage