After the economic freefall of the past few years, banks across the country have been tightening their pursestrings. This summer, the Federal Housing Administration will tighten its lending standards. This is not a "bad" thing but it will make it more difficult for some buyers to purchase a home. Below are some of the changes set to occur:
- Better Credit Scores - Borrowers will need a minimum score of 580 to quality for a 3.5% down payment. Borrowers with lower scores will have to make at least a 10% down payment.
- Higher Insurance Premiums - Buyers who get a FHA insured loan will soon have to pay a higher initial premium. The new premium will be 2.25% of the value of the total loan amount.
- Reduction of Seller Concessions - This summer, the maximum amount of assistance will drop to 3% of the value of the property. The current value is 6%.
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