In November 2012 the FHA announced changes to their loan programs that would soon affect the mortgage industry across the United States. When these changes were announced many Orange County real estate agents hoped that they would not become a reality but, sadly, the FHA changes will be soon.
Who Will Feel The Impact The Most?
Thanks to changes to the FHA’s loan programs, first time home buyers and home buyers with low incomes will feel the affect of the FHA changes the hardest because, they will be required to pay
a higher monthly insurance premium (MIP) which is expected to go up by 10 bps.
This change will affect the debt-to-income ratio of many buyers and according to some mortgage analysts, it will make it even more difficult for many first time home buyers or buyers with lower
incomes to qualify for loans that they previously qualified for before the FHA changes took affect.
When Will The FHA Changes Take Affect?
The monthly-insurance-premium will also be canceled on FHA mortgages that have terms of 15 years or longer; although this change may not affect homeowners who keep their homes for
five years or less, it will affect homeowners who keep their homes for longer, especially when a borrowers loan-to-value amount is taken into consideration.
Homeowners who are currently applying for an FHA loan or have existing FHA loans can expect the majority of the FHA changes to take affect after April 1st, 2013.
What Does It Take TO Qualify For An FHA Mortgage Loan?
To qualify for a for an FHA mortgage loan a borrower must meet the following criteria:
- Have a credit history with positive information from the last two years
- Show a history of consistent and increasing income from the last two years
- Be employed with the same employer for two years
- The borrower must not have had any bankruptcies in the last two years
To learn more about FHA changes or what it takes to qualify for an FHA loan, contact the team of experienced Orange County Realtors at Fred Sed & Associates today at (949) 272-0125.