Over the past few years FHA has increased their premiums to cope with mounting losses to their mortgage insurance fund; starting April 1st 2012 they’re at it again. If you go into contract on or after April 1st 2012 the upfront mortgage insurance premium will increase from the current 1% to 1.75%; on a $300,000 loan that’s additional $2250.
The monthly mortgage insurance will also increase 10 basis points. On a $300,000 loan with a 30yr fixed FHA loan with a 3.5% down payment the monthly premium will jump from 115 basis points or $287.50/month to 125 basis points or $312.50/month; an increase of $25/month.
On loans over $625,500, for all case numbers assigned on or after June 1st 2012, the monthly premium will increase 25 basis points to 140; on a $700,000 loan that’s an increase of $145.84/month.
This change will encourage more potential homebuyers to look into traditional conventional financing with 5% down and lower overall costs.
The mortgage process takes time. Especially if you are a buyer who put in an offer on a short sale. Unfortunately most of the waiting times are things our of our control.
While you are in this waiting period, it is important to keep in “good behavior”. Here are eight things you should absolutely NOT do between your date of application and your date of funding:
- Don’t buy a new care or trade-up to a bigger lease
- Don’t quit your job to change industries or start a new company
- Don’t switch from a salaried job to a heavily commissioned job
- Don’t transfer large sums of money between bank accounts
- Don’t forget to pay your bills — even the ones in dispute
- Don’t open new credit cards — even if you are getting 20% off
- Don’t accept a cash gift without filing the proper “gift” paperwork
- Don’t make random, undocumented deposits into your bank account
Some of these may be a bit unpractical. However, some of these things can help you continue to qualify for your loan based on credit score and loan to value numbers which are checked again right before final funding.
If there is any question, it is always good to consult your lender to ensure it will not impact funding your loan! Sometimes it is not getting approved that is hard–it’s staying approved.