Understanding the new FHA Loan changes

FHA Loan Changes - NOTE: NOW is the time to ACT on buying and/or selling real property!

In an effort to shore up its flailing balance sheet and dwindling capital reserves, the Federal Housing Authority is rolling out sweeping financial changes. FHA borrowers have to look better on paper and be better credit risks.

Mortgage insurance premiums are rising, too.

FHA Up Front Mortgage Insurance Premiums have increased from 1.75% to 2.25%. This translates to .50% added to the borrower’s loan amount. This change goes into effect for FHA Case Numbers ordered on or after 4/5/2010. FHA Case Numbers are ordered once the borrower has an executed Sales Contract and are ready to move forward w/the appraisal order. To put this into perspective, the increase shouldn’t affect a borrowers payment too much since it’s financed over 30 years like the following possible scenarios.

Assuming a $150,000 sales price
Old UFMIP 2533
after April 5th 3256
Difference $4/month

Assuming a $250,000 sales price
Old UFMIP 4221
after April 5th 5428
Difference $7/month

*assumption (5.25% rate, rounded #’s for simplicity, 3.5% down payment)

In its official announcement, the FHA said its trying to better position itself to "manage its risk while continuing to support the nation’s housing market".

The changes are effective with case numbers assigned starting April 5, 2010.

To find out how these changes may affect your real estate purchase or sell, contact a CENTURY 21 Judge Fite Company real estate professional today - 800-451-8055 or email 411@judgefite.com.

Can Real Estate Help Me Build Wealth?

More millionaires are made through real estate than in any other industry!

FACT: 60% of homeowner’s wealth is from the equity they have built in their home.

FACT: The average homeowner’s net worth is 46 times the net worth of the average renter.

FACT: During the last three decades, home values have increased an average of more than 6.0% per year.

FACT: There have been more millionaires made through real estate than through any other wealth building medium anywhere in the world!

A wealth of housing data clearly demonstrates that housing is a good long-term investment. According to a study by the U.S. Department of Housing and Urban Development, 60 percent of a homeowner’s wealth is from the equity they have built in their home. A Federal Reserve study has shown that the average homeowner’s net worth is 46 times the net worth of the average renter.

You might be wondering if buying a home right now is a smart financial decision. The fact is, homeownership is key to building long-term wealth, no matter when someone buys. Studies show that, over time, most homeowners will steadily build equity. For example, during the past three decades, home values have increased an average of more than 6.0% per year*.

If you’re one of the five million people who list their home for sale this year, it has been shown that when it comes to selling a home, you’re better off using a real estate professional. Someone who can get the job done in half the time and can sell it for more than if you sold it on your own. That’s because CENTURY 21 Judge Fite Real Estate Associates are experts—they have extensive experience staging the home, marketing it, showing it and attracting qualified buyers to view it. They can explain options in your area that best fit your situation. Every market is different, contact a real estate professional before you embark on buying or selling real estate.

To find a real estate professional call us at 800-451-8055 or email 411@judgefite.com.

To search over 70,000 North Texas properties, or find out how you can start a career in real estate, log on to www.CENTURY21JudgeFite.com.

*Source: NAR existing home sales historic series.