Changes Are In The Air Again…FHA lowering upfront mortgage insurance premium

Changes are in the air again!  This time it is FHA as they are lowering the upfront mortgage insurance premium (from 2.25% to 1%) and raising the annual renewal (from .55 to 85-90 bps).  It hasn’t been signed by President Obama yet, but will be soon and go into effect on September 7^th.

On an average $175K loan amount that’s going to mean about $31 dollars more a month!  Heck, that a couple of movie tickets, popcorn, drinks and some candy!  Too bad.  But FHA is an excellent source for financing and we certainly don’t want to see them go under or need trillions in governmental bail out.

FHA has many benefits…higher debt to income thresholds, minimum down payment (3.5%) and you can actually get in for a total of 3.5%, gift funds from family members are acceptable, co-signers work great if the occupying borrower is a student or we can’t count their income due to a new self-employed venture or something like that…so lots of advantages.

In other news rates astonishingly continue to drop…absolutely the lowest I’ve seen in my 21 year career.  You have heard it before but it may be a great time to refinance…we are actually refinancing 15 year loans that at 5%…down into the three’s!  or you may consider refinancing your 30 year into a 15 year…keeping the payment the same but knocking years off your mortgage.  Drop me a line sometime for your free no obligation analysis.

Have a great weekend!!