New FHA Change coming to Laveen Area and Maricopa County

By David Baker

Change to financing homes in Maricopa County, including Laveen is coming for buyers using an FHA loan.  This will be the second change this year for the FHA which affects buyers.

The first FHA change of the year came in April 2013.  The FHA change came in the form of the mortgage insurance premium no longer falling off after 78% loan to value is attained.  Prior to April, once your home value reached that 78% of loan to value, it would fall off the loan.  The MIP for a home loan of about $193,000 can be about $1700 a year or $141 a month. (This is example, and not exact).  So if your loan now does not have the MIP drop off at reaching 78%, and loan is kept for thirty years, one could pay easily over $20,000 to MIP.

The new change now coming takes affect starting January 1st, 2014.  The new FHA loan limit in Maricopa County is being reduced to $271,050.  This includes a suburbs and cities, including South Phoenix and Laveen.  To most in this South Phoenix and Laveen area, this change will not have a major impact, as our area average home price in Laveen stands at $190,000.  To other area in Maricopa County, this could have an effect in which loan type a buyer selects.

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5 Things you Must Know Before Buying a Home

When you’re ready to start your South Phoenix, Laveen or Ahwatukee home search, it is critical that you inform yourself about the factors involved. I’m David Baker; I am a realtor working in the Laveen, South Phoenix and Ahwatukee area. Studies have shown that there are at least five factors that buyers should consider when buying a home. Looking into these 5 simple things, can make your purchase and ownership go much easier.

1. You should make sure to get preapproved for a mortgage before you go shopping.

Preapproval is easy, and can give you peace of mind when shopping for your home. Your local lending institution can provide you with written preapproval at no cost and no obligation, and can usually be done over the phone or internet. More than just a verbal preapproval from your lending institution, a written preapproval is as good as money in the bank. It entails a completed credit application, and it gives you the preapproval for a mortgage to the specified level.

2. Know the monthly budget your are comfortable committing to

When you discuss your mortgage preapproval with your lending institution, find out what level you qualify for, but also get information for what monthly payments will be for the loan. Your situation may give you a preapproval that is higher, or lower, than the amount of money you would want to pay out each month. By working back and forth with your lending institution you can determine the monthly amount that works best for you, and the loan max your willing to commit.

3. Know what your long term goals are

There are a number of questions you should ask before you commit to a certain type of mortgage loan. How long do you think you will own this home? What are interest rates doing? Is your income expected to change, up or down in the near term? The answers to these questions and others will help you determine the most appropriate mortgage you should be seeking.

4. Make sure you understand if there is prepayment penalties

More frequent payments on your home can literally shave years off your mortgage and save you thousands. Simply setting up your mortgage payments to be made more frequently will significantly lessen the amount of interest that you will be charged over the term. Make sure that if you decide to do so that your loan is one with no prepayment penalty.

5. Know the cost to close your loan.

There are fees associated with the origination and closing of your home purchase loan. There are also some other fees that you likely will have to pay prior to signing your loan documents, for example the appraisal. Make sure you know full well all the costs associated with your loan, including how much down payment you would be required to place into your purchase.

Follow these five steps before starting your Laveen, South Phoenix or Ahwatukee home search, and the process of buying and owning a home will go much smoother.