Waiting a few extra days or weeks to purchase a home this spring could cost buyers thousands of extra dollars as the office of Housing and Urban Development (HUD) implements several changes for loans guaranteed by the Federal Housing Authority (FHA).
Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board's mortgage backed securities purchase program (which has kept home loan rates artificially low for over a year), these FHA changes make it even more important to act now to save big.
Here are a few reasons why:
On April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly.
Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these "seller concessions" can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000.
There is only one way to avoid being affected by all of these costly changes that lie ahead - submit all FHA mortgage applications by the last week of March.
Are you in fear of foreclosing or close to going into shortsale? Then don't hesitate to contact me, Jeremy Teague of Keller Williams Home Towne Realty. I am a Certified Distress Property Expert. What does this mean to you? Unlike most realtors I have the necessary training, knowledge & tools to help you in a time of financial hardship. Whether it be anything shortsales to foreclosures and in between I know that I can help you and your family.
What is the difference between a shortsale & foreclosure? Why might it be better to do a shortsale as opposed to a foreclosure? Is there anything I can do to help my financial situation? How does a shortsale work? These are just some of the questions that you might be asking yourself. I can assist you with these questions and more.
If you would like more information or need help with selling your home contact Jeremy Teague @ 240-566-1050
Jeremy Teague, Associate Broker, CRS CDPE
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I lead a team of 4 real estate professionals, which are comprised of licensees in Maryland, Pennsylvania, & Virginia. Contact the Teague Real Estate Team today for all your real estate needs.
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