I just read an article from Realtor Magazine Online that I thought was important enough to share. The article was written well enough that you don't need me to re-write it so here you go...
Daily Real Estate News | January 20, 2010 | Share
FHA To Toughen Down Payment Rules
The Federal Housing Administration will raise the minimum down payment for its least credit-worthy borrowers, agency announced Tuesday.
Borrowers with credit-rating scores below 580 will be required to put down at least 10 percent. Those with a credit score above 580 will be able to continue to put down only 3.5 percent. The changes are intended to shore up the agency's finances.
The FHA also will increase its upfront mortgage insurance premium from 1.75 percent to 2.25 percent. The agency is expected to seek congressional approval to raise annual mortgage insurance premiums, paid by borrowers over the life of the loan, above the current 0.55 percent maximum. The amount it will seek has yet been announced.
Source: Reuters News, Corbett B. Daly (01/19/2010)
Although it maynot seem like it to many consumers, I really believe that this is goodnews or call it, tough love if you will. In the Fox Cities we see many people using FHA financing and for those making their first real estate investment it often makes sense to go this route. It also makes sense for the government to clamp down on the guidelines to help keep folks from getting in over their heads and risking the loss of their dream.
If you have questions about Buying or Selling a home in Appleton or throughout the Fox Cities, just pick up the phone and give me a call, Bob Edwards, at (920) 202-2431 or send me an email at firstname.lastname@example.org .