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FHA To Raise Mortgage Insurance Premiums & Reduce Closing Costs

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Real Estate Agent with Centre Realty Group

Original content by Bill Kamboukos NMLS#160440

FHA To Raise Mortgage Insurance Premiums & Reduce Closing Costs

Home owners and home buyers obtaining FHA loans will soon have to pay increased mortgage insurance fees and have less availability for closing cost assistance on these types of loans. These changes are part of a host of updates that are to be implemented by the Federal Housing Administration this coming spring.

Currently, when obtaining an FHA loan buyers must obtain an upfront mortgage insurance premium set at 1.75% of the total loan amount. This premium can be rolled into the loan, but the FHA is now set to raise that fee to 2.25% of the total loan amount. This will be the second increase in the past two years and will serve to help capitalize the FHA going forward.

In addition the Federal Housing Administration has asked Congress to increase the annual mortgage insurance fees that borrowers pay, but whether that will happen or not is yet to be determined.

One thing that will not change is that the FHA will keep minimum down payments at the current 3.5% level for borrowers.

However, the Federal Housing Administration will also reduce the amount that sellers are allow to pay toward a buyers closing costs from the current level of 6% of the sales price to 3% of the sale price. This may have some effect for buyers purchasing less expensive where certain fixed costs do not change regardless of purchase price and where 3% may not cover all the closing costs.

These changes are set to take effect this coming spring and the Federal Housing Administration is said to continue to evaluate its overall offerings going forward. As additional becomes available we will of course present it.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

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TEAN WONG

Real Estate Agent

Centre Realty Group

617.417.4230

tean@teanwong.com

www.teanwong.com

Servicing Boston, Brookline, Newton, Cambridge, Watertown, Belmont, Arlington and Lexington.

 

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