NEWS FOR FIRST TIME HOME BUYERS - Buyers should buy asap.. See changes
Please be advised that there are some potentially big changes on the horizon with FHA mortgages. Please click on the link to the article below for more information:
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/19/AR2009111904742.html
A quick summary of possible options being considered:
- Raising Down Payment requirements to 5% or possibly as high as 10%
- Increasing the Up Front Mortgage Insurance and/or monthly mortgage insurance (which will drive up monthly payments)
- Raising credit score requirements…meaning fewer people will qualify
- Creating credit score tiers, similar to what Fannie Mae and Freddie Mac have done. That means the lower a home buyer’s credit score, the higher their rate will be
- And last but not least, decreasing the allowable seller concessions from 6% to as little as 2%. While true “closing costs” seldom ever come close to 6%, the cost of odd-days interest, escrow reserves, a one-year homeowners insurance policy, appraisal and inspections will often drive up the overall settlement costs to well over 3% and quite often up near 6%. That would mean buyers would need to have even more money available to pay for settlement costs in addition to higher down payment requirements
I just wanted you to be aware of the possible changes. These more stringent requirements combined with the April 30, 2010 end to the homebuyers tax credit are even more reason to tell your homebuyers to act within the next few months if they wish to purchase a home!