New FHA Home Mortgage Rules
FHA home loans
Today, the Federal Housing Administration (FHA) issues apprx. 40% of home mortgages. On April 5, the FHA Up-Front Mortgage insurance premium increase goes into effect. The FHA is raising up its upfront mortgage insurance premium to 2.25 percent from 1.75 percent, boosting the minimum down payment to 10 percent for borrowers with a credit score of 580 and below (it stays at 3.5 percent for everyone else), and reducing permissible seller concessions from 6 percent to 2 percent.
The FHA also will seek legislation to raise the annual mortgage insurance premium to a level above the current cap of 0.55 percent.
The higher up-front mortgage insurance premium won’t affect the amount of cash buyers will need to raise, as that can be financed. But it will affect how much house they can afford, and could increase their monthly payments by $50 to $100.
FHA, which today commence about 40 percent of the mortgage.
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I paid my home off in april 96k to get rid of my house payment. I am still glad that I did. The ole saying “I’m from the government, and I am here to help you”…….you better look out, there is a kicker in there somewhere.
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It’s much harder for troubled borrowers to get a loan now. The lending industry has tightened up standards for lending to eliminate the slide of foreclosures due to subprime lending practices targeting those troubled borrowers. The local media has presented the facts in a negative light, but a return to normalcy is about to occur.
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