FHA is about to get a little more expensive

If you are shopping for a home and plan on utilizing the FHA’s 3.5% mortgage program, you might not want to wait too long to solidify your purchase.  FHA has announced its plan to increase its mortgage insurance premium by .1% in 2013.  Currently, FHA borrowers pay an Up Front Mortgage Insurance Premium (UFMIP) of between 1.20 and 1.50%.  The other change that has yet to be confirmed, is the talk of making mortgage insurance (MIP) permanent on all FHA loans.  Currently, if your mortgage balance were to get to 78% of the purchase price and/or you’ve made 60 timely payments on your mortgage, you could see your MIP fall off your loan.  If the proposed change were to take place, new borrowers would see the MIP stay on their loan for the life of that loan.

FHA mortgages are a vital part of the housing market.  Since mortgage insurers of conventional loans require a 680 credit score and can be expensive, even at that score, the lower credit score requirement and lower down payment option make FHA a very important mortgage program, especially for first time home buyers.  So in short, if you are in the market to purchase a new home, or maybe even considering a refinance, don’t hesitate too long and take the lower mortgage payment that you can get today.

FEMA Map for RI

Today, FEMA declared three counties of RI as disaster areas.  What that means for anyone who is in the process of a mortgage, whether for purchase or refinance, and had your property appraised prior to Hurricane Sandy, your mortgage lender will probably be looking for a reinspection of the property, to ensure that the property is still in good condition.  This is not only to protect the lender, but the potential homeowner.  If you're purchasing a home, it's in your best interest for this to happen so that if the storm did result in damage to your future new home, the seller's insurance has to cover the repair.