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Those Who Wait Will Pay Thousands More This Spring
Waiting a few extra days or weeks to purchase a home this spring could cost buyers thousands of extra dollars as the office of Housing and Urban Development (HUD) implements several changes for loans guaranteed by the Federal Housing Authority (FHA).
Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board's mortgage backed securities purchase program (which has kept home loan rates artificially low for over a year), these FHA changes make it even more important to act now to save big.
Here are a few reasons why:
On April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly.
Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these "seller concessions" can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000.
There is only one way to avoid being affected by all of these costly changes that lie ahead - submit all FHA mortgage applications by the last week of March.
If I can answer any questions you may have about how these changes could impact you, call me. I appreciate your business.
Sincerely,
Karl Peidl
Pleasant Valley Home Mortgage Corp.
856-252-1224
kpeidl@pvhmconline.com
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New Jersey: Licensed by the N. J. Department of Banking and Insurance Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.
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Karl Peidl
Pleasant Valley Home Mortgage Corp.
305 Harper Drive, Suite 3
Moorestown, NJ 08057
© Copyright 2010. All About News, Inc
Also this March the fed's program to buy mortgage securities are going to end so mortgage rates are going to climb as well!
Good reminder, Karl, thanks for the great information