The old days and ways of buying a home are long gone! When shopping for a Home today, buyers need to be educated and aware of all the new rules and regulations involved when purchasing a home. The most important being; "Show Me The Money" First!
Mathews Realty Group
Investment Services/Retirement Planning
Higher FHA-insured loan costs push homebuyers to prowl the market
Annual default premiums (MIPs) on 30-year Federal Housing Administration (FHA)-insured loans for homebuyers with less than 5% down payment rose to 1.1 or 1.15% of the home value from 0.85 or 0.9%, effective April 18, 2011. For a homebuyer paying the minimum 3.5% down payment on a $400,000 home, the FHA’s recent increase in MIPs adds $83 to his monthly payment to the lender. Homebuyers who make down payments of at least 5% can obtain better rates with private mortgage insurance (PMI) companies whose insurance premiums decrease for higher down payments.
In California, lenders are also required to deliver homebuyers a Department of Real Estate (DRE) mortgage loan disclosure statement (MLDS), which includes additional information on top of the GFE. [See first tuesday Form 204, 204-1 and 204-2.]
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