Planning to buy a house this year? Important information you need to know.
The FHA has announced changes to their policies. These changes will have a direct impact on the consumer using a FHA loan to purchase their home. David Stevens, Federal Housing
Commissioner announced: on April 5th the MIP rate will increase from 1.75% to 2.25% percent of the loan amount, which is charged to the borrower. This amount can be paid upfront or added to the loan and financed.
A little background information to help you understand the FHA. The Federal Housing Administration (FHA) is an agency under the supervision of the U.S. Department of Housing and Urban Development (HUD) that insures loans made by primary lenders. The FHA was created by the federal government in 1934 when the Great Depression had brought mortgage lending and home building to a virtual halt. It was by design: to stimulate the housing industry and additionally provide protection to lenders. Lenders must be approved by the FHA in order to provide the borrower an FHA loan. The FHA in turn will provide the lender with insurance against loss in the event of foreclosure as long as the loan met the established guidelines and limits. FHA was not designed to be tax supported. A premium is charged every borrower for the insurance provided to the lender.
The FHA capital reserve has taken a beaten in this economy. The FHA wants to strengthen its capital reserve and announced this change along with others in an effort to accomplish this goal. Bottom line, it is going to cost you more to get a mortgage. On or after April 5, 2010 a $250,000 loan is going to cost you $1250 more. The other changes are scheduled for early this summer.
Planning to buy a house this year? Consider making your purchase prior to April 5, 2010, and closing by April 30, 2010 in order to apply for the tax credit. Now is the time .
Susan Jackson, Associate Broker Direct: 770-551-5852
Email: sjackanrg@gmail.com
1532 Dunwoody Village Parkway
Atlanta Ga. 30338
Fax: 770-551-5866
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