What bad timing for New Jersey home buyers. Just when even more people are trying to buy new homes with the extended tax credit, HUD is considering asking Congress for authority to make changes to the FHA mortgage program. All the changes would either make it more difficult or more costly for borrowers to buy a new home.
The following changes could occur:
- Raise borrower down payment to 5.00% – (currently it is 3.50%)
- Reduce seller assistance from 6.00% to 3.00%
- Increase the minimum credit score
- Increase mortgage insurance premiums
- Other changes on the lender side that would make qualifying more difficult
No doubt, these changes would slow the housing recovery, especially the increase in the required down payment.
What does this mean for borrowers? As I always advise, don’t wait. New home buyers already have a reason to have urgency in order to get the tax credit. But now, the urgency should be intensified.
Any one of the changes above could cause someone to not qualify.
Buyers should get serious, get a mortgage pre-qualification and start the house hunt today.
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