Inside Houston Real Estate

We have all heard what is going on with FHA. Well if you have not heard here is what they are planning. The FHA will be:

Raising the annual insurance premiums that borrowers must pay. This is the easiest place to start, but it would raise borrowing costs for home buyers. The FHA charges an upfront insurance premium of 1.75% of the total cost of the mortgage which most borrowers can roll into their loan, and then they pay additional annual premiums of either 0.5% or 0.55%, depending on their down payment.

Requiring buyers to bring more money to the closing table. The FHA says that it will limit the amount of money that sellers can provide for closing costs on home sales to 3% of the home price, from the current level of 6%. Agency officials say they are also considering potential increases in down payments, but such a move could face heavy opposition from the real-estate industry. The head of the National Association of Realtors says such an effort as would “disenfranchise” FHA borrowers.

Both of these scenarios will start taking effect soon. What do you think this will do to the home market here locally and do you think its a good idea. Let us know your thoughts. We will keep you up to date when we here more about these very important issues.