FHA-Insured Mortgage Update

I knew changes in FHA-insured loans were coming. Now it appears they are almost here. Last week, the FHA said it would tighten loan requirements on loans it insures. Specifically, it would raise the MIP to 2.25% from 1.75% - effective this spring - and then seek permission to increase the percentage again.

The FHA also proposed requiring borrowers with credit scores below 580 to put up a 10% down payment. Those with higher credit scores would still qualify for a 3.5% down payment. In addition, the FHA proposed reducing seller concessions to 3% from 6% of the mortgage. Both proposals will require public comment period before taking effect.

These changes coupled with the fact that the First Time Home Buyers tax credit will be expiring on April 30th, 2010 - is more than enough information to start really thinking about purchasing now and not later. Please do not hesitate to reach out to me if you have any questions regarding the pre-approval process.

Take care ~

$8,000 Refundable Tax Credit for First Time Home Buyers and Others

The $8,000 tax credit for first time homebuyers has been extended through April 30th, 2010 and even more people are included. This stimulus package also includes a $6,500 tax credit offered to homebuyers who have lived in their current residence at least five years and who want to "move up" to buy a NEW primary residence. The purchase and sale contract needs to be mutually signed by 4/30/10 while the home loan needs to be closed by 6/30/10. This is great news for anyone that is trying to buy a home. Here are a few guidelines regarding the tax credit for your reference :

• Refundable : The credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year was less than that amount.
• Paperwork : Applying for the credit will be easy or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers should need to be filed. Taxpayers who have alredy completed their returns can file amended return for 2008/2009 to claim their credit.
• Income Restrictions : To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. ( Higher income buyers may receive a partial but not full credit )

If you have any questions about this tax credit and if you qualify for one, please don't hesitate to reach out to me. I'm more than happy to run a quick mortgage analysis for you.

Take care ~