It’s no secret that costs are going up for Orange County homeowners. As the economy continues to improve, the cost of other things that are tied to the overall health of the economy like the Real Estate market and also FHA Insurance.
For those Orange County homeowners who aren’t familiar with FHA Insurance, this fund is used when a home with an FHA Loan is foreclosed on, HUD announced this week that the FHA Insurance Fund is now negative by almost $14 billion and that serious changes will have to come including raising premiums to keep FHA Insurance around for another 30 years.
FHA Changes To Expect
Besides raising the monthly FHA insurance premium, a wide variety of new requirements will soon be put into place including:
- Debt To Income Ratio – This will be raised and potential homebuyers with credit scores under 620 will be required to have a DTA of at least 43%.
- Down payments- Raised to 5% on loans that are over $625,000.
- Homeowners who have had a foreclosure in the last three years will face stricter oversight and might have a harder time getting a loan.
Time To Buy Now
Homebuyers who are considering buying an Orange County home are encouraged to act now and get prequalified for a Mortgage Loan to lock in Mortgage Interest Rates which are still historically low.
Freddie Mac announced this week that Mortgage Interest Rates will go up for a 30 year mortgage loan to 3.53% from 3.42%, and for those people who were waiting on the fence for mortgage interest rates to go lower, this 11% increase in Mortgage interest rates represents at least $10,000 or more over the lifetime of a typical 30-year mortgage.
To learn more about upcoming changes with FHA insurance, HUD, Mortgage Interest Rates or to view a listing of Orange County homes for sale, contact Fred Sed & Associates today by calling (949) 272-0125.