Waiting to Purchase a Home May Cost You More
If you haven't heard by now, FHA is increasing the annual Mortgage Insurance Premium again by .25% on April 18, 2011. Payments will be higher even if the interest rates remain the same.
Buyers who are ready to take action can still lock in the lower MIP. If they have a contract signed by all parties and get a FHA case number issued prior to 4/18/11, the lower MIP rate will apply.
For a $175,000 home at 5% interest, the new MIP will mean the buyer will pay $35 more to live in the same home. If you don't have to pay more, why would you?
Another possibility is that if interest rates go up .5% by the same effective date, you could pay $88 more to live in the same home. What would you spend $88.36 on if you don't have to make a larger payment?
April 18th is a Monday this year, so you'll probably need to get your contract completed by the previous Friday at the latest to give your loan officer an opportunity to order the case number. If you don't have a loan officer, your real estate professional can recommend a reliable one. Making good decisions will improve your entire homeowner experience and save you money.
Brian Schulman offers expert real estate representation for buyers and sellers of homes in Lancaster County, PA. To learn more, visit http://www.FindLancasterHomes.com/
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