Don’t Wait Too Long, FHA Rules are Changing

For those of you who have tried to get a mortgage done recently, you have probably realized that option are getting smaller and smaller. If you have a high loan to value (You owe almost as much as your home is worth) you may be limited to an FHA loan. This is a mortgage that will allow you to borrow up to 96.5% of your homes value. (Not including the upfront Mortgage Insurance Premium.) FHA is changing some rules January 1st, 2010 in an attempt to make it easier to get a n FHA mortgage, but these one of these changes could actually have the reverse affect.

Currently, HUD requires that all originators work for a broker or banker that is FHA Approved. The new rule will no longer require that a mortgage broker have this approval, instead it will shift the responsibility to the funding lender. The lender will now have sole responsibility for quality control of the loans. The intent of this new rule is to allow more mortgage brokers to be able to originate FHA mortgages. Some speculate that because of the shift in responsibility, lenders could start to have stricter guidelines as to who can originate FHA loans with them.

If the lenders start to become more restrictive than they already are, it is going to be harder to find someone to do an FHA loan that is not a bank. If you have been thinking about buying or refinancing a home with an FHA loan, it would be wise to do it before the end of the year.