The Federal Housing Administration is currently insuring more than 3 of every 10 loans originated... and they see that as a risky proposition!
Because of that, FHA is expected to announce changes today, in an effort to protect the American Taxpayer (who backs the default insurance on this program!)!
Expected changes include:
- Raising the Upfront Mortgage Insurance Premium (UMIP) from the current 1.75% to 2.25%. This means that when you borrow $100,000 on a FHA mortgage loan, and additional $2250 will be added to the mortgage that you pay back... so your $100,000 mortgage just turned into $102,250. If you move, part of that Mortgage Insurance is refunded - so it's not a bad deal! (Click here for more details on how FHA "PMI" works!)
- Changing the amount a Seller can contribute to Closing Costs. Currently a Seller can contribute 6% toward closing costs to a transaction. This is expected to change to a maximum of 3%.
There are news reports that the minimum credit score for FHA is also going up... however, the reality is that 580 has been the minimum credit score that is offered by Lenders for years!
The REALITY is that you really need a 620 credit score to get best priced mortgage offerings!
IMPORTANT TO NOTE! FHA has changed it's rate on MIP (now) FOUR TIMES in the past 2 years. Because of this you could see MULTIPLE posts online saying MIP is 1.5, or 1.75, or based upon your credit score! These are all TIME SENSITIVE pieces of information... if you are CURRENTLY looking for a FHA mortgage, you should consult with a mortgage professional!
We offer the very best mortgage rates available and have the ability to pre-qualify you over the phone in about 20 minutes!
This is a GREAT time to purchase a home in the Triangle!