FHA down payments go up in January. It used to be 3 percent, but in January all buyers will have to have a 3 1/2 percent down payment. It is not a huge difference, but FHA wants buyers to have money into the homes they buy.
When home buyers have no money into the home, they have no vested interest in the Metro Detroit home. That is why 100% mortgages have such a high foreclosure rate. That is why they don’t do 100% mortgages anymore. The home buyers didn’t put any money out of their pocket. The home buyers didn’t have to save, they didn’t have to ask family for the money. Many of those 100% purchases didn’t have a dime into the purchase.
So now if you want a FHA mortgage you will have to put 3 1/2% down. A Metro Detroit home buyer will have to save for the down payment, take it out of their 401K, or they will have to get a gift from family members. A family member is defined as brother, sister, mother, father, grandmother, grandfather. FHA mortgages are not any harder to get. They are just doing more double checking for fraud. They are just doing better appraisal checks, which is good for you. When they turn down an appraisal means that the house is not worth what they say it is. So basically you would have been overpaying for the home.
Getting a FHA mortgage is a great mortgage for many Metro Detroit first time home buyers.
MY quote of the day is:
Alice came to a fork in the road. “Which road do I take?” she asked.
“Where do you want to go?” responded the Cheshire cat.
“I don’t know,” Alice answered.
“Then,” said the cat, “it doesn’t matter.”
~Lewis Carroll, Alice in Wonderland
You have to know where you want to go in order to get there or it doesn’t matter which path you take.
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