March 8th, 2013 10:26 AM by Michael and Jill Kohler
The FHA has announced some significant changes to its programs and policies making it more costly for borrowers.
Some of the changes are:
Higher mortgage insurance premiums. The MIP for most new loans will increase by .10 percent. That would mean about $15 per month for a $150,000 loan. Premiums for larger loans will go up .05%.
MIP for the life of the loan. You used to be able to cancel your MIP after the loan balance dropped to 78% of the original amount.
Manual underwriting for low credit score. If the borrower’s credit score is lower than 620 or their debt-to-income if more than 43% the documentation of compensating factors will required by the lenders.
Higher down payments. The FHA also intends to increase its down payment requirement for mortgages larger than $625,000. The down payment would increase from 3.5 to 5%.
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