HUD and FHA Announce Loan Changes: How Does this Affect the Lake Norman Home Buyer? You might be asking what does this mean for you as a home buyer; HUD/FHA, what does that even stand for?!

  • FHA stands for Federal Housing Administration. FHA is insured by the Federal Housing Administration, a division of the U.S Department of Housing and Urban Developmentaka HUD.
  • FHA insurance on a mortgage means that the mortgage lender is protected if the home buyer defaults on mortgage payments.

What are the benefits for doing an FHA Loan?

  • Smaller Down Payment: FHA loans only require a 3.5% down payment on the home you are purchasing. A great loan if you want to get into a home but only have a minimal nest egg to put down on your purchase.
  • Closing Costscan be included in your mortgage loan. Again if you are strapped on funds for closing costs, which range depending on the price of the home you are buying, this is a great incentive to this loan.

The changes with FHA loans starting April 1, 2012 will affect you if you are going this route with your loan:

Increasing the mortgage insurance premium 0.10% for loans under $625,500 and by 0.25% for loans above $625,500.

Upfront Mortgage Premiums (UFMIP)will increase from 1% of the base loan amount to 1.75% of the base loan amount.

So if you are purchasing a $200,000 home your 1% cost would be $2,000 up front. Now with the changes starting April 1, 2012 you will be paying $3,500.

If you have any questions or concerns in regards to real estate in the Lake Norman Area or loan questions please feel free to contact Alyssa Roccanti at (704) 654-9305 or alyssaroccanti@gmail.com