If you are a home buyer and thinking you'll try and get a home loan using FHA, the rules just got tighter and you likely will need a larger down payment than you might have been expecting. The govt released a press release covering the upcoming changes slated to take effect by end of January 2010.
Some of the major new points include -
1. Mortgage Insurance Premium – up-front to go from 1.75% to 2.25% and monthly fee of .55% may go up accordingly as well
2. FICO scores of 580 and below will require 10% down instead of the 3.5% minimum. Most lenders have their own guidelines already in place and require a 620 score to begin with so this ruling will not effect most
3. Reduce allowable seller concessions from 6% to 3%
If you want to read more about this as well as connecting to a link to the govt press release, visit our blog post on Benjamin.com's blog.
Generally all lending is becoming tighter and full documentation is being required. If you are getting ready to become a home buyer, it is critical that you become pre-approved before beginning to look. Know what sort of loan you can get, and the price range of home that is comfortable for you and your family. If you need lender connections, we can connect you to responsible, reliable lenders.
Whether you are a buyer or seller, if we can help you, please get in touch with us.