HLM Mortgage Blog

Well, we knew it was too good to be true!  Over the past couple of years, tightening guidelines implemented by Fannie Mae and Freddie Mac have caused a dramatic increase in applications by homebuyers for FHA loans.  These Federally-backed loans still allow up to 96.5% financing for qualified buyers.  Homebuyers have been able to purchase homes with low down payments and still have the seller pay up to 6% (of the sales price) toward their closing and escrow costs.   

In today's article published on money.cnn.com, it has been determined that FHA loans experience higher past due rates (about 5.0 % higher) than non-FHA loans.  As a result, it appears that the mortgage insurance premiums required to insure these loans are about to increase from 1.75% of the loan amount to 2.25% of the loan amount.  This would result in a $750.00 higher premium on a $150,000 loan amount.  Most buyers finance this premium, however it important to note that whether one finances this premium or pays it out of pocket, ultimately the cost is going up.  The other main change is the reduction of seller-paid closing costs from 6% to 3%.  For more information, please click on the following link:  http://money.cnn.com/2010/01/19/real_estate/fha_loan_requirements/index.htm

The bottom line is that in this industry, change is happening at lightning speed.  As a result, it is extremely important that you work with a dedicated mortgage professional who constantly seeks to keep you informed throughout the process.  The days of treating a mortgage like a commodity are over.  Without an experienced, knowledgeable advisor on your side, you will likely be disappointed with your service and more importantly, incompetence by a loan officer can cost you big bucks!  At HLM Mortgage, we set realistic expectations, provide valuable, timely information, and we always watch out for your best interests.  If you would like to speak with one of our professionals, please call 404-836-1120 today. 

HLM Mortgage Company NMLS ID 152777

Georgia Res License 17140

FHA Lender ID 26417-0000-2