HOME BUYERS FHA MORTGAGE NEWS
If you are interested in buying a home in the near future, please do so before the Federal Tax Credits expire and FHA loan fees and down payment requirements increase. Those who wait will pay thousands more this coming spring.
Here are a few reasons why you should not wait;
1) As of April 5, 2010 the cost of up-front mortgage insurance for loans guaranteed by FHA will increase from 1.75% to 2.25%. Even though the up-front mortgage insurance is typically financed in the final loan amount the impact on the monthly mortgage payment will be minimal, but overall the increase can be significant. Almost $1000 on a $200,000 home purchase.
2) Later this spring the amount of money that a seller can give back to the buyer from the sale proceeds will cap at 3% of the purchase price. Currently a seller can give back up to 6%, which in a lot of cases the buyer is able to get into the property with very little out of pocket closing costs. On a $200,000 purchase, for example; these “seller concessions” can increase the amount of cash at closing by $6,000. This is significant and in today’s market a lot home buyers are short on cash.
3) There’s word out that the required down payment on FHA loans will increase from 3.5% to 5%. Home buyers…that is a $3000 increase. We do not know when this change will occur, but we will keep you informed.
So, if you are in the market to buy a home there is only one way to avoid the extra cash out of pocket that will be required this spring… please get your FHA mortgage application in no later than the last week of March 2010.
If you have any questions or we can be of service in your home search, please email us or give us a call.
Toll Free: 877-858-5003 Email: info@floridahomes-info.com
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