Buying a home is generally a complicated decision for any new home buyer, during the current economic turmoil this decision is becoming more complicated with the constant lending requirement changes and the economic forecasts calling for higher mortgage rates. Even with these changes, a potential home loan borrower can evaluate the entire process on their own with an online mortgage calculator.
The consensus economic forecast since the end of the year has been one calling for higher mortgage rates. Fortunately, the rate increases have not yet materialized and consumers do not have to fret over the increased cost of homeownership due to a raise in interest rates.
Mortgage rates have in fact risen modestly this year. The average 30 year fixed rate mortgage was 5.04% for all of 2009 according to the weekly FHLMC mortgage survey. For January, 2010 the average 30 year rate has increased to just 5.05%, on average, according to the same survey. Using the mortgage payment calculator it is easy to see how a minor rate change like this or an even larger mortgage rate increase that may come, if the economy does expand, will impact the monthly mortgage payment.
Now, housing regulators have announced plans to tighten their lending standards for FHA mortgage loans. The Federal Housing Administration made the changes to protect taxpayers from increased loan losses and support the housing market.
The changes in for FHA loans will initially impact the insurance costs to the homeowner but the Federal Housing Administration is also proposing raising the down payment requirement as well.
The first part of the changes entails increasing the mortgage insurance premium charged to the borrower to 2.25% from the current level of 1.75%. This change is due to take effect this spring. The bigger change is the down payment requirement change which requires new borrowers to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put a 10% down payment to obtain an FHA mortgage.
The mortgage calculator can help determine what price home and what monthly payment a potential home loan borrower can afford based on these changes. The mortgage insurance premium increase can be input into the mortgage calculator under closing costs. The down payment change also be input into a mortgage qualification calculator as we all as the mortgage payment calculator to evaluate both the maximum loan amount a borrower may qualify as well as the change in total funds needed to close on a home loan based on the new changes.
Whether these changes will impact a borrower or not, every new home loan applicant should review their home loan financing position by using the mortgage calculators to investigate mortgage rates and payments, mortgage closing costs and costs over the life of loan as well as an estimate of what your qualification status is.
Tags: down payment, FHA mortgage loans, mortgage, mortgage calculator, mortgage closing costs, mortgage payment, mortgage payment calculator, mortgage rates, online mortgage calculator
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