A recent bulletin from HUD outlines some changes which will impact homebuyers.
In an effort to restore the depleted insurance reserves for FHA mortgages
the UFMIP or Upfront Mortgage Insurance Premium is increasing from
1.75% of the loan amount to 2.25% of the loan amount.
This amount is added to the loan and financed over the term of the loan.
On a base loan of $300,000 this will be an increase of $37.27 per month.
This change will take place in the spring of 2010.
In addition, the maximum seller contribution of 6% will be reduced to 3%
sometime in the sumeer of 2010.
While these may seem to be minor adjustments to guidelines, they may have
a substantial effect on affordability. Rates will have an upward bias later in
2010 and when coupled with these new guidelines, buyers who may qualify
in February may not later in the year.
I'll post more as it becomes available from HUD and lenders.
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