First Time Home Buyers, BUY NOW
Posted by Paul Busino on Wednesday, February 3rd, 2010 at 2:21pm.It is time for the first time home buyers or buyers looking to utilize a FHA loan to buy now.
All indications from HUD are changes are coming soon to the FHA loan product which requires only 3.5% down. It looks that HUD is going to reduce seller concessions to 3% from 6%. This means that the seller will only be allowed to pay up to 3% in closing costs for the buyer. For example, on a $200,000 purchase, the seller can currently contribute $12,000 towards closing costs and escrows, in the future the seller will only be able to contribute $6,000. This will cause some buyers to not qualify to purchase a home until they have saved more money. This is going to potentially result in the buyer to bring more money to the closing table.
In addition, they are going to increase the up front mortgage insurance premium to 2.25% of the loan amount from 1.75%. The funding fee is added to your loan and goes into the FHA insurance fund. This increase is going to add .5% to your loan amount. For example, if you borrower $200,000 to purchase a home utilizing FHA, currently the loan amount would be increased to $203,500 to pay the premium. Under the guidelines proposed, that same $200,000 loan will be increase to $204,500. This increase will also slightly increase your monthly payment.
Do not wait any longer to purchase your home or it will be more expense to utilize an FHA loan. Do not forget the tax credit which exists for many home buyers, you must be under contract by
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