Nothing lasts forever. Great rates, great financing terms, Stimulus money. At some stage these all disappear. FHA entry terms just tightened (Jan 21, 2010): it announced yesterday new policy changes to strengthen it’s capital reserves and protect itself from rising defaults. The most significant changes include: (1) increasing the amount of up-front cash paid by all new borrowers and (2) requiring much higher down payments from those with the poorest credit.
The FHA will increase MIP (mortgage insurance premiums) that borrowers pay upfront at closing from 1.75 percent to 2.25 percent of the loan value. Most FHA borrowers will continue to make down payments of as little as 3.5 percent (this increased from 3% not too long ago) when they take out a loan, but those homebuyers with credit scores of less than 580 will have to come up with a down payment of at least 10%.
If you're a short sale or regular buyer in the Louisville Kentucky or S Indiana area, call Metro1 at 502-254-9600 for updates and referral to lenders for mortgage locks. Inquire also how your $8,000 stimulus money can be used to assist in these charges. For buyers in the Louisville Metro area as much as $20,000 may be available to you from local programs.