Everything in Real Estate is based on dead lines, and just like Real Estate, all homebuyer benefits have their own finite time line as well. Today’s blog is a quick reminder of three important timelines you’ll want to be aware of if you are currently in the housing market.
FHA Up Front Mortgage Insurance to Increase April 5-FHA is now responsible for over 30% of the loans done in this country. This is a dramatic increase as FHA offers a number of compelling benefits (particularly for First Time Homebuyers) that Conforming financing cannot (lowest down payment available, allowing co-signers and gifts to help qualifying, much more lenient on credit scores, etc.). The down side to all these benefits is that on all FHA loans, there is an up front premium charged to cover the FHA insurance pool. This is in addition to the monthly mortgage insurance. Currently the premium is 1.75%. With all case numbers assigned on or after April 5th, this premium will increase to 2.25%. This premium can be financed 100% into the loan amount without affecting down payment requirements, so the net effect of this increase is that borrowers will end up with a loan amount that is .5% higher than they currently would.
First Time Homebuyer Credit to expire April 30-you must be in contract no later than April 30th 2010 to qualify for the $8000 first time homebuyer credit (or the $6500 credit in the case of non-first time homebuyers who have owned for at least five years and are buying a new primary residence). However the transaction does not need to close until the end of June.
The Fed’s Mortgage Security Repurchase program set to expire March 31-The not so dirty little secret is that the Fed has spend almost $1.2 TRILLION dollars over the last 14 months to artificially drive down mortgage interest rates. The current historically low interest rates are the direct result of the Fed’s benevolent action (with our collective national future income as its collateral!). This program will expire March 31st and many market experts agree that rates will begin to rise once the program is eliminated.
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