Change is coming...buyers and sellers should get educated....

Before I became a Realtor, I was a mortgage officer.  One of the most popular loan programs that my clients utilized to purchase homes was an FHA loan.  FHA loans were easy for people to take advantage of:  they had no income restrictions, discounted mortgage insurance, more lenient credit requirements and could close relatively quickly.

The rules have changed a lot for these loans in the years since I have written mortgages and they are about to change once again--and both buyers and sellers need to pay attention.

Buyers who have been in a position to purchase a home but have procrastinated for one reason or another will want to move rapidly on a home purchase before the end of spring.  Reason one is that the Homebuyer Tax Credit is rapidly coming to an end, and there is no hope for an extension in sight.  Reason two is that FHA is getting ready to make some changes to their program, which will mean more money out of a buyer's pocket, higher credit scores from those buyers and higher insurance premiums, translating to higher home cost not only upfront but also monthly.

Sellers take note as well--if you have been reluctant to show your seriousness in selling, you may just miss the boat, and your buyer.  Be aware that FHA loans do have a loan cap (currently $312,500 in most counties in NY State) so if you are out of that price range you are more insulated from these changes.  Bear in mind that the typical first time home buyer  and move up buyer is well within this price structure and has the potential to be dramatically affected.


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