More borrowers than ever before are flocking to New Jersey FHA loans to buy new homes and to refinance their current higher rate mortgages.
A mortgage backed and insured by FHA remains very popular for many New Jersey homeowners. Currently, the minimum down payment for FHA is 3.5%. However, later this year, buyers might need to have more than 3.5% to get an FHA-insured loan.
The minimum down could rise to at least 5% across the board – possibly some time this year. Already, FHA has raised the minimum down payment to 10% for those with a credit score of 580 or lower. Those this may sound problematic, it is of little significance at all because borrowers with scores that low had little chance of being approved by any lender regardless of the down payment.
Upfront mortgage insurance premiums for FHA have increased from 1.5% to 2.25%. Changes have been occurring for the past 2 years and will continue as government tries to stabilize the program and keep it adequately funded. As changes occur, most will not favor the borrower. Those with plans to buy should not put off buying. If you want to refinance, delaying will probably cost you more.
FHA loans are much needed in today’s housing markets. Without FHA, I can’t imagine where the housing marekt would be right now. By keeping mortgages affordable and available to first-time home buyers, FHA has been a boom to our economy.
New Jersey FHA loans have certainly helped grow and sustain the New Jersey markets. Give me a call for a no obligation consultation.
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