Please submit your FHA Mortgage Application by today, Friday April 2nd, 2010. Starting on Monday your insurance premium is on the rise!
So yes, FHA loans are gettimg much more expensive.
The upfront premium is going from 1.75% to 2.25% of the total loan amount, and this is a big number.
On a $350,000 loan the upfront insurance costs are now $7,875 instead of $6,125. That is $1,750 more expensive then the old guidelines. Thank goodness you can roll this into the loan amount.
Earlier this year, the FHA announced that it would take this step, and several others, to boost its reserves, which are dropping as it takes on big losses from loans it has backed over the past three years. The FHA has been under pressure to take even more dramatic steps, particularly to raise minimum down payments from their current level of 3.5%, but instead opted for a package of tweaks that officials say will be less costly to the housing market.
This is the beginning of a few changes to a FHA mortgage financing.
In the summer, the FHA will also reduce the amount of cash that sellers can kick in for closing costs to 3% of the purchase price, from the current level of 6%. Meaning borrowers will pottentially brong more money to the closing or have “more skin in the game”
I suggest you know and understand all current and FHA mortgage guidelines if this is the Mortgage product you will be taking advantage of in purchasing your home.
Ps. $8,000 tax credit for first-time home buyers expires in less than one month.
Inquire within for FHA Mortgage financing.