FHA Mortgage Insurance Changes Coming on April 9th, 2012 are NOT the End of the World

 

      It is said ...

 

     Times change, people change, situations change, relationships change ...

     The only thing constant is change. 

 

                                                                                            Author unknown  

 

 

 

     Yes, change is inevitable.  That is true ... but I personally believe, that HOW you react to that inevitable change is what is important.  It can be your defining factor moving forward.

 

    And if any business industry has seen and had to endure change over the past few years, it's certainly been the real estate industry.  Change has been radical  and constant. 

    More change is coming.  We have to look no further than April 9th, 2012 to experience that change too.  That's the day that upfront costs for FHA Mortgage Insurance will go from 1.0% to 1.75% (on most all scenarios).

 

    Buyers/Borrowers and Real Estate Professionals alike can be upset or complain about this upcoming change, but it won't stop it from happening.  Perhaps then a positive outlook ... a "lemon into lemonade" outlook ... is the one we should tackle this change with?  What I mean is this ... 

 

     Good news can still be found, even taking this upcoming change into consideration.  It's not the end of the world.  Rates have remained low for a long time and it appears that they will remain low a good while longer. 

     Now that is NOT to say that we won't see some increase, but rates should remain advantageous.  And don't overlook that there IS still time for action prior to this FHA Mortgage Insurance change coming. 

 

 

     A Buyer still has time to find a property, get it under contract, APPLY FOR MORTGAGE through April 8th and avoid the higher fees.  That means if you're a Buyer that has already begun the home buying process, this post serves as an "Alert to Action". Get Moving!! 

 

     If you're an Agent, you've still got the time and opportunity to communicate with Buyers in your pipeline that are close to taking some action.  Let this news serve as a catalyst.  All is not lost!

 

     I've put together an illustration (below) of the realities, pros, and cons regarding the upcoming FHA Mortgage Insurance changes coming on April 9th.  Utilizing real numbers, I hope to clearly demonstrate what a Buyer's mortgage payment will be PRIOR to the upcoming changes .. and then after them. 

 

	Current	Proposed
Loan Amount = $200,000
Interest Rate = 3.75%
Current Cost of Upfront Mortgage Insurance *	$2,000.00	$3,500.00
Current Monthly Payment for Mortgage Insurance *	$193.58	$211.98
Total Payment  (Excluding Taxes/Hazard Insurance)	$1,129.07	$1,154.42
Change (Increase) in Payments	$25.35
LOSS of Buying Power	$5,500.00

 

 

 

     

     In most cases, a $5,500 reduction in a Buyer's approval price CAN be overcome.  And consider this ...

 

 

     In the scope of things, THIS change ... an increase in FHA Mortgage Insurance costs ... still remains a better option than no FHA-insured loans at all.  April 9th will come and go ... and it will not be the end of the world.  Working together, we'll overcome it.

 

 

 

 

 

      * Work with a professional mortgage lender with 35 years of successful lending experience from which to draw upon to benefit you and your finances. Contact me today, so YOU can take advantage of every financing and financial option available to you.  I'll be glad to hear from you ... and have the opportunity to earn your business.

     I can be contacted through any of the following:

Direct:  815.277.4036   Cell/Text:  708.921.6331

Email: gmundt@thefederalsavingsbank.com

Website: www.genemundt.com

Skype:  630.219.1316

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Mortgage Consultation

    

 

 

 

                                    

     Gene Mundt, Sr. Vice President

Personal NMLS #216987

The Federal Savings Bank

1823 Centre Point Circle, Naperville, IL  60563      

                             

Now on Skype!   630-219-1316

www.genemundt.com

 gmundt@thefederalsavingsbank.com