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FHA May LIMIT Seller Contribution-BUYERS NEED MO' MONEY!

FHA May LIMIT Seller Contribution-They are at it again!!

FHA is proposing a rule to limit seller contribution One reason is that they feel that the 6% cap that is currently in place is serving to artificially inflate the appraised value of homes.   The new rule will drop the maximum seller contribution from 6% to a maxium of 3% or $6000 whichever is GREATER.

There is also an increase in the annual mortgage insurance premium (also called monthly MIP) by .10% going into effect for loans under 625,500. Over 625,500 there will be a .25 increase.  EFFECTIVE FOR CASE NUMBERS ASSIGNED ON OR AFTER APRIL 1st.

Not only will there be an increase to the monthly cost, but the Up Front Mortgage Insurance Premium will increase from 1% to the 1.75%.  This number is typically financed into the loan. EFFECTIVE FOR CASE NUMBERS ASSIGNED ON OR AFTER APRIL 1st.

What does that mean for your buyer's?  HIGHER out of pocket costs and a HIGHER monthly mortgage payment.  

Here's an example assuming a $250,000 home for sale in Baltimore, Maryland. 

PLEASE NOTE: The fees noted below are estimates and may not represent the true cost to purchase a specific property.  For the actual cost to purchase a home in Maryland, including rates and fees , please contact me directly at 410-960-2061.  The 4% rate is for example purposes only.  Your actual rate may be higher or lower than 4%.

A REAL WORLD COMPARISON USING:

                                       TODAY'S REGULATIONS    AND    PROPOSED CHANGES

FHA seller contribution 2012 FHA up front premium 2012

If you have been pre-qualifed using the current numbers, be sure to ask your lender if the upcoming changes will affect your ability to purchase.  Realtors, if you have buyers under contract on short sales, be aware, any delay may mean a buyer that no longer qualifies or needs more money out of pocket.

Is this one more reason to get off the fence and buy today? 

If you would like to read and weigh in on the proposed changes click here. 

 https://www.federalregister.gov/articles/2012/02/23/2012-3934/federal-housing-administration-fha-risk-management-initiatives-revised-seller-concessions#h-15

FHA May LIMIT Seller Contribution-BUYERS NEED MO' MONEY!

 

Warm Regards,

Bridget McGee  Maryland Mortgage Mama  NMLS# 196068  Corridor Mortgage Group.   410-960-2061 EHO   bmcgee@corridormtg.com or marylandmortgagemama@gmail.com

 

If you are considering purchasing a home in Maryland and want to be sure you are mortgage ready, my brother Tony and I will be happy to help! We help to make the mortgage process a pleasure! 

If you already own your home, we are happy to provide a no-cost mortgage review to help you to determine if refinancing may be in your best interest.  Please contact me at 410-960-2061.

Comment balloon 3 commentsBridget "Mortgage Mama" McGee • February 28 2012 12:13PM
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