FHA Will Increase Cost For Home Buyers

FHA Will Increase Cost For Home Buyers

Based on a new article published by Lorraine Woellert, as of April 1st, the Federal Housing Administration (FHA) will increase up-front-premiums. If you have FHA clients on the fence, now is the time to buy before the cost of their loan goes up!

They’re talking about increasing the up front mortgage insurance premium from 1% to 1.750% of the loan amount on top of the increase for the monthly PMI from 1.15% for loans up to $625,499 to 1.25% and for loans above $625,500 from 1.15% to 1.5%. Buying before the changes are implemented can save your clients a lot of money! Also have your FHA clients re-qualified if they wait to buy based on the increased fees which will offset their debt to income ratios slightly.

For Example:

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Current FHA Loan:

$500,000 – Purchase Price
$482,500 – Base FHA Loan Amount (96.5% LTV)
$487,325 – Total FHA Loan Amount w/ UFMIP financed

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30 Year Fixed FHA

3.750%
$2,257 Principal and Interest Payment
$467 PMI

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Future FHA Loan:

$500,000 – Purchase Price
$482,500 – Base FHA Loan Amount (96.5% LTV)
$490,435 – Total FHA Loan Amount w/ UFMIP financed

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30 Year Fixed FHA

3.750%
$2,271 Principal and Interest Payment
$511 PMI

This is more dramatic above $625,500, now is a great time to take advantage of the lower premiums. The changes may be in place sooner then we know.

If you should have any questions please contact Gary Limjap at 310.586.0339.

Original article:

FHA Will increase Cost of Up-Front Premiums
By Lorraine Woellert – Feb 27, 2012

Brentwood, CA Condominium Sales Are Active In 2011

Despite the economic rollercoaster ride everyone seems to be on these days, the Brentwood, California real estate market has been very active this year having seen 109 condominiums sold to date.

There are currently about 72 Brentwood condominiums available with a median price of $595,000. In addition, there are also 34 condominiums currently in Escrow which only reaffirms the premise that people are buying because of the extremely low interest rates.

Out of the 34 condominiums under contract, 24 of those are priced at $599,000 or less and demographically speaking are 1st time home buyers.

One bedroom condominiums now are available in the low 300’s and entry level two bedroom condominiums could be purchased starting in the high 300’s.

We have not seen Brentwood, CA condominium prices as affordable as these in many years.