Posts Tagged ‘closing costs’

United States Department of Housing and Urban ...

Image via Wikipedia

Currently, FHA allows the seller to pay up to 6% in closing costs.  Yes, I have at least one conversation per day saying it is only 3%.  Guess what, it’s 6%, but that is getting ready to change.  FHA has proposed to lower it from 6% to 3% and is currently accepting public comment regarding this change.  What does this mean to you?  If a buyer has very little cash in the bank, this change may kill a few deals and it will definitely force homebuyers to save their money before applying for a mortgage.  The reason behind this change is FHA is cutting back on their risk.  The more money the borrower has in the deal, the more committed they will be.  As more information comes available, I will let you know.  If you are considering making an offer, now is the time to get approved and get the process started.

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076.  Bonus: Click to get a free, no obligation preapproval. I love to work with my readers!

 

Advertisements

FHA is Changing

Posted: January 22, 2010 in Uncategorized
Tags: , ,

Beginning April 15, 2010, FHA loans will have a completely different complexion.  The Up Front Mortgage Insurance Premium is rising from 1.75% to 2.25%.  So, on a $150,000 loan, the borrower will need to qualify and finance another $750 into their loan amount.  Also, FHA loans will now only allow 3% seller paid closing costs and not 6%. 

I don’t like it and neither should you.  In an effort to provide a better option to the future homeowner, we are going to make an FHA loan less attractive and at the same time, the only option.