There have been proposals for some changes to the FHA loan guidelines that could greatly impact your qualifying for a loan, especially those who are qualifying marginally.
The following changes have been proposed:
First, that down payment of 3.5% be raised to 5%.
Secondly, that interest rates be raised. Interest rates have been very low due to the efforts of the government to boost the housing market. According to the California Association of Realtors, a mortgage analyst predicts that by the end of 2010, interest rates could rise to 5.75% to 6%.
This graph will show you the difference in payment of a $250,000 loan with a 5% interest rate when interest rates increase.*
Some buyers are sitting on the fence waiting for further decline in prices. It may not be the best thing to do since interest rates have as much effect on the purchase of a home. As a rule of thumb, a 1% increase in interest rate is equal to approximately 10% change in price.
Note:*This is not intended to be an offer of credit but is an estimate of a possible mortgage based on the lender’s underwriting guidelines.
If you need additional information, do not hesitate to contact me at (909) 376-8615. I would be happy to answer your questions, discuss and analyze what is best for you. As a Residential Financial Consultant, I help people understand the tax advantage, financing alternatives and investment aspects of home ownership and what makes now an incredible time to buy.
Elizabeth M. Eugenio, (909) 376-8615
Certified Residential Specialist, Certified Distressed Property Expert, Residential Finance Consultant, Graduate Realtor Institute
Elizbeth@HomesByLiz.com, www.HomesByLiz.com
Century 21 Superstars