FHA Loans

Thursday, September 25th 2008, 11:40 pm
By: News 9

Here's more on the FHA loan changes:

According to Dawn Neu with First Mortgage:

Starting Oct. 1st, The MIP, Mortgage Insurance Premium is going to change to 1.75% up front and monthly premium of .55 %

Starting Jan. 1, 2009, downpayments will increase from 3 percent to 3.5 percent.

We've also heard there's a plus side.  If you're a first time homebuyer (have not owned a home in the last 3 years), you'll now qualify for a tax credit worth up to $7,500.   You have to buy your house by July 1, 2009, to qualify.

If you plan to buy, Neu says first thing's first:  Get Pre-Approved.  She says get your past W2's, paystubs, rental history together and get it to your lender.
Once you get pre-approved, you will know how much you can afford.  A lot of that will also depend on your credit score.  Neu says it needs to at least be 580 and you can't have had any late payments in the last 12 months.   

If your credit score isn't great, she says it will take 6-8 months to get it improved... so if you're interested in buying soon, ask your lender how to raise your score.