Orange, CA (PRWEB) March 13, 2013
The changes, set to take effect April 1st of this year, will increase the amount of mortgage insurance paid on FHA loans. Per Federal HUD guidelines, FHA home loans are required to carry mortgage insurance for a minimum of five years and the premiums for that insurance have gone up incrementally over the years since the mortgage crisis in 2008. It is important to mention that FHA mortgages are backed by the United States Government.
"Someone who qualified for a $350,000 single family home in Orange County will now find themselves competing for a $250,000 single family home. There aren't many $250,000 single family homes in Orange County, this means competing for a condo. Which will add HOA dues and further reduce their purchase price. I feel bad for families who are going to miss the deadline" says Scott Schang, a branch manager for Broadview Mortgage.
According to current federal guidelines, homeowners seeking to refinance with an FHA loan must close escrow before the April 1st deadline. The same goes for homebuyers who are using an FHA loan to purchase their home.