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The Matt Russo Real Estate Team601 East Baltimore Pike
Media, PA 19063
April 5th FHA Changes could cost Delaware County PA Home Buyers Thousands More at Closing
If you are planning on buying a house this Spring in Delaware County, PA, don’t delay. Waiting to submit your mortgage application may cost you thousands at closing due to FHA changes. To take advantage of current Office of Housing and Urban Development (HUD) guidelines for loans guaranteed under the Federal Housing Authority (FHA), mortgage applications must be received by your lender during the last week of March.
Applications received after March will be affected by new regulations. Here are the changes that will impact your home purchase in Delaware County, PA and neighboring communities:
On April 5, 2010, the FHA will increase the cost of up-front mortgage insurance from 1.75% to 2.25% of the purchase price. This insurance is required by the FHA. Here is an example of how you can potentially be impacted by this change. A home costing $225,000 with a down payment of $8000 will result in an increase of $1,325 for mortgage insurance. Although this amount is typically added to the home loan amount, you will be increasing the amount of your total mortgage and monthly payment.
Additionally, later in the Spring of 2010, there will be a reduction in what is called “seller concessions.” This will impact how much cash you (the buyer) will need to bring to the settlement table. Currently, a seller is able to return up to 6% to the buyer from the proceeds of their home sale. This amount is being reduced to 3%. What does that mean in dollars and cents? On a $225,000 home, you will need to bring an additional $6,750 to settlement!
Also, as a potential home buyer, there are other dates to keep in mind. The Home Buyer Tax Credit has a deadline of April 30, 2010. This is a substantial tax savings for home buyers. And, on March 31, 2010, the Federal Reserve Board’s mortgage back securities program expires. This program has kept home loan interest rates “artificially” low during the past year.
There are many wonderful homes to consider in Delaware County, PA and The Matt Russo Real Estate Team can help you find your dream home. Visit www.RussoHomes.com today and use our powerful real estate search engine to see what is available in areas such as Ridley Park, PA, Springfield, PA, Middletown, PA and other locations in our historic rich community.