Don't Wait - Act NOW or Pay beaucoup $$$ Later

By
Real Estate Agent with Jack White Real Estate 15598

Those Who Wait Will Pay Thousands More This Spring

Waiting a few extra days or weeks to purchase a home this spring could cost buyers thousands of extra dollars as the office of Housing and Urban Development (HUD) implements several changes for loans guaranteed by the Federal Housing Authority (FHA).

Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board's mortgage backed securities purchase program (which has kept home loan rates artificially low for over a year), these FHA changes make it even more important to act now to save big.

Here are a few reasons why:

On April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly.

Later this spring, the amount of money that a seller can pay on behalf of the buyer will be reduced from 6% to 3%. The reduction in these "seller concessions" can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000.

There is only one way to avoid being affected by all of these costly changes that lie ahead - submit all FHA mortgage applications by the last week of March.

If I can answer any questions you may have about how these changes could impact you, call me at 907-529-6602.

Posted by

Marianne 907-529-6602

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Topic:
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Location:
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Tags:
investing in real estate
mortgage insurance
real estate
tax credit
firsttime homebuyer
fha rules
hud rules
sellerpaid concessions

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Rainmaker
241,515
Barb Fischer
Big Block Realty - La Mesa, CA
San Diego and La Mesa Real Estate

Another factor is that there has to be an approved contract, so if it's a short sale, the BANK must sign off on this. As we all know this can take months!

Feb 04, 2010 08:10 AM #1
Rainer
100,267
Marianne Grant, Realtor
Jack White Real Estate - Anchorage, AK
CRS 907-529-6602

Gooood point, Barb,

especially at these times when we are dealing with so many short sales. Thanks for the clarification. Have a great year. Marianne

Feb 04, 2010 08:42 AM #2
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Rainer
100,267

Marianne Grant, Realtor

CRS 907-529-6602
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