If you are in the market for a new home in the Omaha area you are probably considering an FHA insured loan. You are not alone. FHA insured loans make up around 30 percent of new mortgage loans. But FHA has had to make changes which will affect you and which you should know about in advance. As you can see from its popularity FHA has to stay healthy and to do so its standards are now a little tougher.
The good news is that FHA loans only require down payments of 3.5 percent of the purchase price. That has not changed. But because of the necessity of bringing more revenue into the agency here are the rule changes:
1. The upfront mortgage insurance premium will increase from its current level of 1.75 to 2.25 percent of the total loan amount. Those fees can still be a part of the total fees covered. Here is an example given by the agency: If the mortgage borrowers take out a $200,000 mortgage they will now pay a fee of $4,500 instead of the current fee of $3,500.
2. The borrowers need a credit score of at least 580 to qualify for an FHA loan. If you have a score lower than 580 you will need to come up with a down payment of at least 10 percent of the purchase price of the home.
Don’t be confused by the new rules. Make certain you are working with a reputable lender. If you need the names of such people be certain to give me a call at 402-670-8775 or email me at Marie.Otis@cbshome.com. I’m here to guide you through the maze of options the home buying process entails. You need a friend you can trust; let me help.