Most borrowers, especially first time buyers, are getting their financing via FHA home loans. There were some recent changes that increased the up front mortgage insurance amount when buying a home with a FHA loan. Now, those upfront payments will be reduced, but the monthly premium will be increased.
The record breaking number of foreclosures have really caused a strain on mortgage insurance companies. To help make up for the losses, the FHA recently increased FHA mortgage insurance premiums to 2.25% to help offset some of the losses. The upfront costs were two much for most buyers, who can’t save up for any kind of down payment, so congress recently changed the mortgage insurance premiums so that the up front portion will be less expensive, 1%, but the monthly portion will be more expensive. The annual premium will now be .85% for FHA borrowers with more than 5% equity, and .9% for borrowers with less than 5% equity.
If you will be buying Logan Real Estate in the near future, and if having savings for the down payment isn’t an issue for you, then in the long run you’ll probably be better off buying your new home before the September 7th date. If, you’re having a hard time just saving up the 3.5% FHA down payment, then it will be easier for you to buy next month.
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