It was announced earlier this week that the Federal Housing Administration (FHA) will be increasing the Mortgage Premium charged to all purchase money mortgages, and full credit qualifying refinances. The increase is 25 basis points, bringing the Mortgage Premium charged to 1.75% from 1.50% of the loan base loan amount.
For a borrower seeking a loan in the amount of $200,000, this would equate to an extra $500, charged in the closing costs. FHA loans tend to have higher closing costs than conventional loans, this Mortgage Premium is one of the contributing factors to that fact. The need for FHA loans will likely only increase, as many potential buyers are lured into the market by lower housing prices, and the attractiveness of the FHA loans that provide attractive options such as only 3% down payment, and generous credit guidelines to those with lower scores.
The FHA needs to increase the Mortgage Premium in order to cover losses on bad loans, or seek taxpayer funds. Just when thousands of Americans are seeking out these FHA loans in order to qualify for their home of choice, and just as affordability is returning, cutting back on FHA loan availability is really out of the question for the time being.
To learn more about housing and loan options available to you when buying a Santa Clarita Home, contact The Scv Agents Team @ 661-291-2707.
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