FHA Changes are Coming

FHA changes are coming!
The FHA upfront premium is going to decrease as of September 7th 2010. It will go from 2.2.5% to 1%, however the monthly premium will increase from .55% to somewhere between .855-.90%

What does this mean for the Buyer?
The buyer will be spending about $37 more per month on an average of a $200,000 home and almost $60 more per month on a home over $300,000.

Is there an alternative?
If you have good credit and have a reasonable amount of money to put down you can go with the conventional loans like Fannie Mae or Freddie Mac, however with the ever increasing rules and requirements for their underwriting guidelines an FHA loan may still be the best option for buyers with less for down payment. (content courtesy of The Mortgage Advantage Newsletter)
Here is more on information on FHA mortgages.
With home prices and interest rates at historic lows, many young people are trying to buy their first home. But often, they do not have the income or credit to qualify for a loan. Here's where the FHA loan comes in. A relative can act as a non-occupying coborrower. That means that the relative's income, assets and credit are combined with those of the borrower who is going to live in the home. This can help the young borrower qualify when he would not be able to otherwise. Only the FHA loan allows a non-occupying coborrower to help a borrower qualify for a home loan. And best of all, the borrower still gets the same low FHA rates as if he would have been able to qualified on his own.
Call me on my cell this weekend if you need my help Matt Smith (602) 369-5158. First National Bank.
With that said, here are the rates for the weekend on the most popular loan products:

30 yr fixed conf 4.50% 4.811% APR

15 yr fixed conf 4.00% 4.399% APR

30 yr fixed FHA 4.625% 4.833% APR

15 yr fixed FHA 4.25% 4.522% APR

5/1 libor ARM 3.25% 3.788% APR

30 yr fixed VA 4.625% 4.908% APR