Just saw this article today on CNN.com relating to FHA iinsurance rates and length of PMI changing and wanted to share.
you gotta be kidding me, I am about to apply for a house this February. Ugggh. More money out of my pocket.
The biggest shock out of all that is having to pay PMI for the life of the loan if you don't put at least 10% down! That will turn a lot of people off, they will need to either go Conventional or refi into a Conventional at a later time.
Still doesn't say when this will take effect, which is really the most important thing.
Rumor is the new policies will go into effect for new FHA case #'s on & after 4/1/13. Next step is that a mortgagee letter will be released. Right now the only information HUD has put forth on this is at http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2013/HUDNo.13-010
Another interesting tidbit to note is that manual underwriting will be required for borrowers who have scores less than 620 & total debt ratios higher than 43%. There are still several lenders who go down to a 580 score (or even lower) for FHA financing now, but that could be reduced when this new policy goes into effect.
When is a case number assigned? My wife and i can't apply officially until mid-March as we are waiting out the 2 year discharge from her bankruptcy. If we apply and are approved by the end of March...will this still have an impact on us since we won't actually close the loan until the house is built later in the summer?
On a purchase loan, FHA case #'s can be assigned after you have an accepted purchase contract. They are good for 6 months, and can be extended under certain circumstances.