FHA guidelines we’ve been told to look forward to in the Spring are

  • The requirement for higher credit scores to qualify for the low down payment option. In fact, scores under 600 may knock you out of the running immediately; and it isn’t just FHA loans, it is also conventional mortgage loans.
  • Higher mortgage insurance premiums. The upfront mortgage insurance premium will go from 1.75% to 2.25%.
  • Fewer seller concession. Historically six percent seller concessions were acceptable across the board, FHA and conventional. Now the FHA is expected to allow only a three percent contribution from the seller.

So, in order to get a mortgage, you’re going to need more cash (higher down payment and covering the closing costs with reduced assist from the seller) and, maybe even more importantly, a higher credit score. Look for articles on upping your score here in the next few weeks. We’re doing a ten part newsletter called “Credit Score Survival for the American Consumer”.

As for having more money . . . Well, we’re all working on that one, aren’t we!