Tougher Mortgages and More Fees!

As an investor it’s not only good to know your business but to know others related business that will help all the stake holders.

I came upon this piece of information recently, if you haven’t heard yet, you will today or tomorrow I am sure.

FHA has just announced that- starting “sometime” this spring, they will increase the required upfront FHA fee (or upfront mortgage insurance premium) from 1.75% to 2.25%- on all FHA mortgages.

On a $200K loan amount, that is an extra $1000 in upfront borrower fees. Most people add that to the loan amount, which is OK, but still it is another fee and I don’t think people will be too thrilled with it.

Also, FHA will make it harder for people with FICO scores less than 580 to get a mortgage. They will require a 10% down payment instead of the 3.5% DP. Basically, that will eliminate most people that have a low credit score.

If you have anyone you are working on that is considering an FHA mortgage, they should get on it very soon- these new policies will be implemented probably in the next 2-3 months- ??

Hence investors like myself will be needed more and more as I can provide owner financing and lease to purchase to own options. Should be a very interesting year in the world of real estate this year!