New Update For FHA Loans
The FHA announced January 31, 2013 that it will increase fees to an underwriting changes may make this first time home buyer affordable mortgage program less affordable. Beginning April 1, 2013 the mortgage insurance premium will jump 1/10th of a percentage point. With the required 3 1/2% down payment making the loan-to-value less than 80%, thus the mortgage insurance premium is required by FHA.
The FHA also announced that starting June 1, 2013 that it will cancel rescinding its popular policy of cancelling the mortgage insurance payment when the loan to value reaches 78% of it’s original amount. The premium will have to be paid the entire life of the loan.
Other changes scheduled to take place on June 3, 2013 is a mandatory “manual” underwriting of loans with applicants that have a total household debt to income ratios exceed 43%. This will also impact applicants with a credit score below 620.
The new rules will make conventional loans seem more appealing to a lot of borrowers in the real estate market who can afford 5% or more down payments.
For more information on this topic click on the link to go to the Seattle Times website. FHA Loans Are Getting More Pricey.