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From the article, it sounds like no date has been set and an annoucment is set to be made on or before March 31st. There is no way they would implement it that quickly, probably will annouce it then and say it goes into effect the following January or something like that.
Also, people can always refinance into a conventional loan down the road, they don't have to stay with an FHA loan for the life of the loan.
I disagree. The article states:
"No date has been set for the change, HUD spokesman Lemar Wooley said by email. He expects an announcement by March 31 or sooner."
That means that the announcement regarding when the change will occur will be made by March 31 or sooner, but there is no date set for when the change will be implemented.
@MovingForward_2012 wrote:
Right but rates will be going up so refinancing won't be as attractive and may not save any money. If you read the article closely it said that the new rules will go into effect shortly after the announcement on or before March 31st. So it is best to get in now if you can.
What happens to people who are in the process but can't close yet since it's a new build? I hope we can be grandfathered in if there is a change because it would be BS otherwise.
@Mike_B03 wrote:
@MovingForward_2012 wrote:
Right but rates will be going up so refinancing won't be as attractive and may not save any money. If you read the article closely it said that the new rules will go into effect shortly after the announcement on or before March 31st. So it is best to get in now if you can.What happens to people who are in the process but can't close yet since it's a new build? I hope we can be grandfathered in if there is a change because it would be BS otherwise.
I think you will be grandfathered in as you sign the mortgage insurance disclosure form quite awhile before actual closing and I think that form will protect you.
You're right, no one knows when it will be implemented but I am assuming it will probably within a year from now. Don't know if it will be sooner or later. But I just wanted to give folks that are considering putting off buying a home for 1-2 years a heads up that if they will be doing an FHA loan, they might want to reconsider their timeframe given these changes. The bigger the house, the more mortgage insurance costs. And $346 per month for me is not trivial so I look forward to the savings in five years. If it is $50 a month for a smaller home, the change is not so big of an impact.
Any chance of refinacing into a conventional loan fairly soon after you get your house? Over 5 years, you'll end up paying $20,760 in PMI. It will depend a lot on what interest rates are later on, and how much closing costs are...but if house values go up and you have some additional money to put down, it would probably be good to go in that direction.
How are you getting the $3600 back from the IRS? Is it related to the PMI?
Assuming she is referring to tax benefits...
But I would discuss any tax related issues with a professional CPA who is qualified.