Chicago Borrowers To Pay Higher Premiums For FHA Loans
Thinking about getting a little help from Uncle Sam for that mortgage or refinance? It might cost more than you think, say Chicago bankruptcy attorneys.
This month the Federal Housing Administration announced it will raise premiums for its popular government loans by a quarter of a percentage point. It's a tiny increase, for sure, but for folks toeing the line between being able or unable to afford a loan, it could have big consequences.
More than 30 percent of home purchases in 2010 were made with FHA loans. To put the significance into perspective, that's up from just 5 percent in 2005. With credit tight and money for down payments short, the government program is the only thing that has made owning homes possible for many Americans.
Unfortunately, the program is running low on Congress-required reserves, and raising rates is the best way to provide a boost. The recently approved rate hike comes on top of November changes that included adding a minimum credit score and increasing the minimum down payment to 10 percent, up from 5 percent.
New numbers aside, FHA loans still have the potential to help many buyers, especially now that they've become more mainstream, even being offered at some big banks. And if a federally insured loan is out of your price range? Maybe it's time to take a look at why. Is your credit score too low to qualify for a typical mortgage? Do you never seem to have a positive balance in your bank account? More often than not, carrying too much debt is the root cause of financial limitations.
But just because you're being stifled by debt today doesn't mean you can't change tomorrow. Bankruptcy can provide the support you need to pay down debt so you can start improving your credit - and your chances of owning a home. If you already have a house but can't manage the mortgage, Chapter 13 can stop foreclosure and get your costs under control so you can afford those house payments. Don't wait until the foreclosure notice is in the mail - take action while there's still time. At DebtStoppers, our Chicago bankruptcy attorneys can determine whether bankruptcy is your best bet when you sign up for a free one-on-one debt analysis.