Act Now to secure your FHA Case Number BEFORE June 3rd!

I know – I sound like we are in a loop with the changes in FHA loans in the Cedar Rapids area, but these changes are pretty big and will impact FHA lending. April 1st, 2013 a rate increase was implemented to help build up FHA’s mortgage insurance fund and the reduction of our Government involvement in the mortgage market.

Indeed in April premiums did rise, making monthly payments for those seeking this type of loan rise with
them. But even more newsworthy than that was the new requirements for how long this premium is attached to their payments.

The previous rules stated that anyone with a down payment of less than 10% would be required to pay a mortgage insurance premium until they paid off 78% of their principle balance. Those making a down payment greater than 10% were not required to have the insurance at all.

Under the new guidelines, however, those obtaining an FHA loan after June will be required to pay the insurance premium either for the life of their loan or after refinancing. Those paying higher than 10% as a down payment will still be required to pay the insurance premium for at least 11 years.

This has some buyers pausing for the cause before going through with an FHA loan. While homes remain affordable and interest rates remain low the increase in the MIP is still impacting how much house a buyer can realistically afford from a monthly-budget perspective.

If you’re not planning on staying in your home for a great deal of time, don’t get too discouraged. It takes almost a decade to pay your principle down to 78% assuming normal prescribed payments that are made on time. So for those planning to sell in just a few years the new rules won’t have that much of an impact. But if you’re buying your forever home this could present a cause for consideration.

You do have an option BEFORE June 3rd – Secure your FHA Case Number BEFORE the changes!! Even if you close after June 3rd, your loan will be “grandfathered” in at the original mortgage insurance policy. Contact me today to find out how!

Call 319-480-5262 or follow me on Facebook!!