As you all are aware, the mortgage market has experienced some significant changes over the past year. One significant change will directly affect home owners who are debating whether or not to purchase a new home. These changes include the following developments:

1. Maximum Seller assistance will be reduced from 6% down to 3% on all home purchases. Seller assistance allows home buyers to write a higher offer price for the purchase of a home in exchange for help toward closing costs. This causes prospective home buyer’s, already short of cash, to have to pay more of their closing costs
When this goes into effect: TBD, Spring 2010

2. The cost of required up-front mortgage insurance for loans guaranteed by FHA will increase from 1.75% to 2.25% of the loan size. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up-front mortgage insurance premium will increase by $965
When this goes into effect: April 5th, 2010

3. The Home Buyer tax credit is in effect for ratified purchase contracts placed by April 30th 2010 for settlement by June 30th. This credit provides eligible first time home buyers a tax credit for up to $8000 and existing eligible home owners a credit for up to $6500. Contact me for details.