Buyers and the FHA

Many years ago we used to think that anyone who bought a house using an FHA loan was a bad credit risk or a first time home buyer with limited resources. Although that really was not true that was the prevalent thinking at the time. Today FHA loans may be the way to go. The interest offered are great and there are several programs available. However on July 14,2008 the upfront and annual mortgage insurance premiums associated with FHA loans will be restructured.
What does this mean for you? It could possibly mean higher and more expensive mortgage insurance. The amount of upfront fees and monthly mortgage insurance premium you pay will be based on your credit score, loan length and loan to home value. The formula is becoming more risked based. This is the result of the recent debacle in the mortgage industry.
What can you do to avoid this increase in costs? First of all you can buy before the new formulas go into effect. That means finding and closing on a home no later that July 13, 2008. The other option is to raise your credit score to 680 or above and buy after the new rates go into effect. Both of these options are viable. If you aren't sure how drop me an email and I will explain.
If you want to read the Federal Register issued by the Department of Housing and Urban Development dealing with the issue I have attached a link for that purpose.
Thanks and I hope you have a great day.
Ron