Jan 20 2010
Why Buying A Home Now Makes Sense!
I’ve written several times about why buying a home sooner rather than later makes sense–especially if you are looking to borrow with an FHA loan and/or are a first-time buyer. Today the Federal Housing Administration announced changes to FHA-insured loans that will begin significantly affecting home buyers starting in the spring. These changes include:
- An increase in the mortgage insurance premium by 50 basis points from 1.75% to 2.25%. This change will be effective in the spring of 2010.
- Implementation of a new down payment system where borrows can qualify for the 3.5% minimum down payment only if their credit score is at least 580. Borrowers with credit scores less than 580 will be required to put down at least 10%.
- Starting this summer, sellers will not be able to offer as much help to buyers to pay their closing costs. The maximum amount of assistance will drop to 3% of the value of the property from the current 6%. That represents thousands of extra dollars buyers will need to have on hand to purchase and close on a home.
Aside from these issues, please don’t forget that the current tax credit of up to $8,000 for first-time buyers and up to $6,500 for move-up buyers expires on April 30th, 2010. You must be in contract by April 30th, 2010 and closed by June 2010. I keep reminding people that this tax credit does not appear slated for renewal in Congress so this may be your last chance to take advantage of it.
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