Knoxville FHA Buyers You Better Hurry — Fees Increase 1/2 Percent Starting Monday, April 5, 2010

FHA closing costs increase by 1/2 percent April 5 2010

Have you Been Looking At Homes?? Plan on using FHA financing to buy your new Knoxville Area Home??

Starting Monday, April 5, 2010, getting an FHA mortgage in Knoxville TN and nationwide will be more expensive for borrowers.

In new guidelines set forth earlier this year, the FHA announced plans to raise additional revenue and reduce the overall risk of its mortgage portfolio.

The changes include the following:

  1. Increase Upfront Mortgage Insurance Premiums from 1.75% to 2.25% for everyone
  2. A plan to reduce seller concessions from 6 percent to 3 percent
  3. An increase in minimum downpayment for FICOs 580 or lower

For your own loan, to avoid being subject to higher loan costs, make sure to have your FHA Case Number assigned prior to Monday, April 5, 2010.  That means you’ll want to give a full mortgage application before the weekend so your lender can register your loan in time for the deadline.

But don’t leave your application to the last minute.

Friday is Good Friday so most banks will be closed. Your true FHA deadline, therefore, is Thursday April 1.

Also worth noting is that the FHA isn’t done with its changes.

In its policy statement, the group also announced its plans to petition Congress to raise monthly mortgage insurance premiums.  The FHA’s formal request, in summary:

  1. Raise monthly premiums by roughly 0.30%, or $25 per $100,000 borrowed per month
  2. Lower upfront mortgage insurance premiums by 1.25%, or $1,250 per $100,000 borrowed at closing

For now, the request is neither approved nor acknowledged by Congress. It’s merely a request. And in the event that Congress does approves it, the FHA reserves the right to change its projections.  Either way, it means higher costs for consumers.

The best plan, therefore, is to get your FHA mortgage into underwriting ahead of the switches because borrowing money will be harder, and more costly.

There has never been a better time to buy a home in the Knoxville Area than right now. The rates are low, prices are low and their are plenty of homes to choose from on the market. Another reason is the tax credit available not just to first time home buyers but move up buyers that I talked about in an earlier post. Considering all of the above NOW is the time to get out there and start shopping around for a new home.

Check out my 5 Step Program to make your buying experience smooth and painless. It is FREE and will help you. Call me at 865-675-8326 or Rick@TheBigOrangePress.com I would love to help you find a new home

Tax Credit Ends Soon