Orlando, Florida (PRWEB) April 14, 2013
Best Rate Home Loans reports that due to upcoming changes to the Federal Housing Agency’s lending program, Floridians looking to finance through the FHA can save thousands of dollars on mortgage insurance premium (MIP) costs and home down payments if they act before June 3, 2013.
This news comes in light of a January 31 release from the FHA that announced severe crackdowns on some of the lending program’s most financially attractive options. While some of those restrictions have already gone into place, potential Florida FHA borrowers who apply for an FHA loan about ten days short of that June 3 deadline can still reap many of the program’s stellar benefits by obtaining an FHA case number.
The major change that Florida borrowers should be aware of with these pending rules is that the FHA’s policy of canceling MIPs after a mortgage had been paid on 78 percent of its total price will no longer be in effect. This means that there is an extra 22 percent of a mortgage that would be paid every month until a loan is closed out.
FHA mortgage rates and MIPs are based on factors including loan amount, loan duration, interest rate and MIP rate. Right now the average MIP rate is around 2 percent, and a pretty typical monthly MIP for a $100,000 home would be about $50. That might not seem like a lot to pay a month, but if one puts in perspective that they’d be paying that $50 a month 22 percent longer under the new rules, the numbers add up quick.
Let’s take the example of a Florida FHA borrower who is evenly paying a $50 MIP per month on a 30-year loan. If that person gets and FHA case number before June 3, 2013, it might take them 281 months to reach that 78 percent mark where their monthly MIP could then be dropped.
However, if that person did not get a case number prior to June 3, they might have to pay an MIP for all 360 months of a 30-year loan, or 79 months more than if they had acted before June 3. All of a sudden, that $50 a month becomes $3,950 that the borrower is throwing out, simply because they didn’t act quickly and obtain an FHA case number prior to June 3.
Another thing to take into account when applying for Florida FHA streamline refinancing is that so far in 2013, Florida has had the highest foreclosure rate in the country, with one in every 282 homes being foreclosed on (31,726 foreclosures to date), according to RealtyTrac.
While this may not reflect well on the state’s overall economic situation, it’s a blessing in disguise for would-be home owners and those who have had to foreclose due to the rapidly increasing amount of pre-owned properties on the market, and the ability to acquire those properties with the assistance of an FHA loan.
"One of the benefits FHA brings to the table for families rebounding from a foreclosure or short sale is the timeline in which that family can secure institutional financing,” says Chris Brown of Certified Mortgage Planners in Lake Mary, Florida. “Most conventional lenders require a period of 4 years to pass where FHA gets them back into the position of home ownership a year earlier."
Brown adds that those interested in an FHA loan apply at least 10 days in advance of the June 3 deadline to ensure that their case number is secured before the new policies go into effect.
About FHA loans:
More than 34 Million homes have been insured via the FHA mortgage program since the program’s creation in 1934.
In comparison with conventional mortgages that have stricter underwriting statutes, FHA-insured loans attract a wider range of home buyers by offering simpler credit standards, lower down payment requirements and more diverse income calculations.
FHA loan perks include:
-Low down payment
-Flexible credit guidelines
-Streamlined refinance options
-All-in-one home renovation loans
Best Rate Home Loans (http://brhomeloans.com) is a nationwide professional collective of approved mortgage lenders and loan providers whose expertise is in FHA loans and other low down payment or streamlined refinance refinance programs. Call 888-269-5585 for more information about FHA loan eligibility.