Louisville KY real estate agents are always looking for a way to inspire their clients to buy now. The latest round of increases in upfront mortgage insurance costs and yearly premium are just the latest incentive to get our Louisville home buyers to make a purchase before April first. That is when the increase in the yearly premium goes up to as high as 1.25%. The upfront cost of an FHA loan will increase from 1.0% to 1.75%. This will strengthen the capital reserves at FHA and at the same time increase our client’s cost.
This is important to The Hollinden Team as a good many of our Louisville home buyers procure there home with an FHA loan. We find that first time home-buyers are often using FHA mortgages. This is due primarily to the low down payment needed.
As our home-buyers are learning about the total cost of home ownership, they often want to revolt when they hear that they have to pay Mortgage Insurance (MI). We tell them it hard to complain about paying Mortgage Insurance when they look at the alternative of needing 20% down with a conventional loan. The 3.5% down payment required from FHA looks pretty sweet. Regardless, this latest changes by FHA will make a difference in the monthly payments of our Louisville real estate clients.