Real Estate Specialist with 14 years Experience! Top Producer RE/MAX Premier Properties 1st Qtr. 2010
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FHA Gives Home Buyers One-Month Window: What does this mean for home buyers?
A home buyer purchasing a $200,000 home using a $193,000 FHA mortgage before October 4 would pay an insurance premium of $88.46 per month. If the same home buyer waits until after October 4, the insurance premium would jump to $148.01.
“In this example, the home buyer would lose $59.55 per month, or $7,146 over a 10-year timeframe,” Nicholas said. “Although the upfront mortgage insurance premium is going down after October 4, the real impact to the home buyer is actually a net increase in their out of pocket costs because the monthly premium is going up by 63%. Remember, sellers can pay the upfront premium or it can be financed into the loan amount, so homebuyers rarely pay the upfront premium out of pocket. On the other hand, the increase in the monthly premiums will be paid right out of the home buyer’s pocket with their mortgage payment each month.”
Ironically, home buyers who plan to be in the mortgage for less than three years and decide to pay the upfront fee themselves (instead of having the seller pay it for them), may actually save money by waiting until after October 4 to apply for an FHA loan.
How long do you plan to be in your home? This will determine the benefit or cost to you...Please remember this is only FHA loans. If you are planning to get a conventional loan this does not affect you. |
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| RE/MAX of Texas | Tina Crisp, RE/MAX PREMIER | 2100 Dallas Pkwy Ste 102, Plano, TX 75093 | (972) 403-2000 | Contact Me by E-mail |
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