I have been doing FHA mortgages for a long time. I have advocated for this type of financing for many of my clients, as it was the best solution for them, especially for first time home buyers.
FHA will soon not allow a homeowner to cancel the monthly mortgage insurance after a certain time period and once they had a 22% equity position in their home. Those days will be over shortly. Once they have mortgage insurance, you are stuck with it, unless you sell or refinance. Why should the consumer have to make either decision, to get out from under the monthly mortgage insurance?
I am not saying that I will never do another FHA loan, but nowhere near as many as I used to do. If FHA is working toward rebuilding its reserves, how do they accomplish that, by doing much less business?
This article, FHA to tighten underwriting, raise premiums, By Inman News provides the details on the new changes to FHA.
