In one of the first moves by the federal government to help stabilize the finacial end of the housing market, it was announced today that they are going to raise the amount they charge for insurance on a FHA loan by .25 basis points. This change will affect all FHA lonas that are written on or after April 18, 2011. The amount may not seem like a lot of money; however, it can affect the financing ability of potential homeowners.
Currenlty the FHA is the largest single source for home loans in America today. With there requirements of only 3.5% down payment of the sale price; it makes them desireable in these economic times and with rates so low advantegous for borrowers.
The FHA average loan amount is $157,000. Based on that sale price for a home; the monthly mortgage payment will increase by $33.00 a month under the new guidelines.
For home buyers the FHA charges an insurance premium to homeowwers in order to back the loan. This is there way of insure them against the loans that do not get paid. Due to the limited down payment required to do a FHA loan the federal governement wants a security blanket (so to speak) to protect their interest in the loan.
Dave diCecco
Realtor/Broker
www.davedicecco.com
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