So you're ready to buy your first home.
So you're ready to buy your first home. Are you thinking of getting an FHA loan? FHA has made some recent changes that you should consider before obtaining an FHA loan.
In a press release yesterday, the FHA have confirmed that all new FHA buyers will pay Mortgage Insurance for the Life of their Loan starting April 1, 2013. What this means is that new buyers will pay FHA Mortgage Insurance Premiums or “MIP” for the life of the loan.
The current rules allow an FHA borrower who reaches 22% equity, and has been had their loan for approximately 5 years to remove the MIP.
The FHA made 3 new changes to their current rules:
1. The FHA is eliminating MIP removal on loans. This means new buyers will pay FHA “MIP” for the life of the loan now.
2. THA is increasing monthly mortgage insurance payments again, this time by .10 basis points. So if you are getting an FHA Loan for a $400k mortgage that is an increase of $40 a month.
3. FHA will propose an increase in the minimum down payments for jumbo loans from 3.5% to 5% down payment. A jumbo loan is defined as a home loan for more than $625,000.
For more information regarding the new changes to FHA please click here to visit the FHA website.
The infographic is a quick look at home much are first time buyer homes in some of California's metropolitan areas. Please keep in mind that these home prices are the median value.
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