- Owe more than their homes are worth
- Be current on their existing mortgage
- Live in the home being refinanced
- Meet credit requirements
- The existing lien holder must agree to write off 10 percent of the unpaid principal
New FHA rules help home buyers, owners
HOUSTON
If you are planning to get an FHA loan, you'll be able to put down less money -- but you'll pay a bit more each month. On top of that, homeowners who currently owe more than their home is worth may be getting some help.
Despite a struggling economy, Realtor Tim Surratt says he's still selling homes.
Many buyers are turning to FHA loans for financing.
"We are seeing a lot of homes going FHA more this year than I have seen in years," Surratt said.
Starting in October, those buyers will have new rules to live by when getting an FHA loan. That's when upfront insurance premiums will go down to one percent of the purchase price.
On a $125,000 home, the upfront mortgage insurance premium will go from just over $2,800 to $1,250.
At the same time, annual premiums will be going up, but not by much.
"It is not significant," Surratt said.
Surratt says on a $125,000 mortgage, the changes would add $27 more a month to the mortgage payment.
"I think their car payments go up more than that, or their car insurance, or cell phone or any of those bills," he said.
The other change starting Tuesday is designed to help current homeowners who owe more than their house is worth.
The Short Refi program is designed to allow homeowners to refinance their mortgages to take advantage of lower interest rates.
Here are some of the requirements homeowners face to qualify:
