This is a must read. If you or anyone is considering purchasing a home within the next year, now maybe the best time to take advantage of the opportunities with FHA, the federal tax credit and the low interest rates.
Tax Credit
Don't miss out! The tax credit will be expiring soon. To qualify, the contract must be accepted by the end of April and the closing must occur before the end of June. This makes now the time to buy for all first time home buyers. Move up Buyers, you also have the $6500 Federal Tax Credit. These credits are in addition to the Maryland First Time Buyer and local tax credits, grants and closing costs offered throughout Maryland, Anne Arundel, Howard, Montgomery and Baltimore Counties.
Rates
There is a general agreement in the Financial Market that interest rates will be edging up slightly over the next few days/weeks. No one can say for sure how far, but they will be going up and some analysts predict a .25% - .5% increase in mortgage rates that are now hovering around 5.125% with 0 points. The primary reason for this increase in interest rates is due in part to the Federal Government's decision to end their purchasing of mortgage backed securities.
FHA
The FHA has recently made several changes to their loan programs. One of their most recent changes went into effect on April 5th. This change, increases the up-front mortgage insurance premium that borrowers pay from 1.75% to 2.25%. This is a .5% change. As you may or may not know, this up-front mortgage insurance premium can be paid up-front or financed into the loan. FHA made this change, to offset the perceived risks on the loans that they are originating. The monthly mortgage insurance premium of .55% annually has not been changed.
Secondly, FHA has proposed another change that has not taken effect and the date of its effectiveness remains unknown, but they will be reducing the amount of closing costs that they seller can pay. As it stands now, sellers can pay up to 6% of the purchase price in seller concessions, which the borrowers use to cover their closing costs.
Lastly, there has also been mention that FHA may increase their minimum down payment from 3.5% to 5%. This has not been confirmed.
Please forward this to anyone you feel may benefit. If you or anyone you know has questions, needs further information call me at 443.305.2844 or 410.320.3427. I am happy to help in you in making an informed decision regarding today's real estate market. :)
Comments(0)