Congress extended the “Temporary Loan Limit” of $729,750 through 2011. This is good news for those of us in the Bay Area where housing prices are so high. This news, however, was probably met with a yawn from brokers in Topeka, Kansas.
FHA Up Front Mortgage Insurance Premiums (Up Front MIP) go down on Monday from 2.25% to only 1.0% of Loan Amount, as we have mentioned.
We are reminding people now that these Premiums can be paid in THREE ways: (1) The borrower can “finance them” by simply adding the amount to the loan. This has no affect on the LTV guidelines – loans with financed MIP can exceed 96.5% LTV; (2) Borrowers can pay for the Premiums at close, “out of pocket”; or (3) The SELLER can pay for the Premiums. FHA still allows for 6% Seller Credits. Such large credits (associated with high purchase prices) are often more than enough to cover ALL closing costs as well as Up Front MIP.
Call Jay Voorhees at (925) 855-4491
Real Estate Broker, CA Bureau of Real Estate, BRE# 01524255, NMLS# 335646