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Archive for the ‘Mortgage Loan Programs’ Category

FHA Insurance Premiums Drop

FHA Insurance Premiums Drop

FHA Insurance Rate Cut Helps Offset Some Recent Interest Rate Hikes

FHA’s annual mortgage insurance premiums are being reduced by .25% for most new borrowers who are closing on their FHA insured loan on or after January 27, 2017. This reduction will offset some of the recent interest rate increases that we have seen happening since November of 2016.

The savings from the lower FHA mortgage insurance premiums are very good. Here is a chart illustrating approximately how much FHA borrowers will save if they choose an FHA loan of >= 20 years in length:

Loan Amt Down Payment Previous MIP New MIP Estimated Savings per $100K
< $625,000 < 5% .85% .60% $250
< $625,000 > 5% .80% .55% $250
< $625,000 < 5% 1.05% .60% $450
< $625,000 > 5% 1.00% .55% $450

FHA homeowners with an FHA loan already would have to refinance to take advantage of these cuts in the cost of the mortgage insurance.

The reason we are seeing this reduction is because of the strong, U.S. housing market. Home prices have been moving higher for about five years now, which is part of why cuts like this are possible.

Also worth noting is that additional cuts to the FHA upfront insurance premium (currently at 1.75%) could be on the horizon. The upfront premium was as low as 1.00% in 2010 and 2011, so future cuts are possible. Our country’s continued economic recovery and strength in the housing market will play a big part in determining if this happens.

Should you have any questions regarding a new FHA loan, or if you’re just looking for trusted mortgage advice regarding your next home loan, CONTACT US directly for a complimentary consultation. We’re here to help!

On your team,

Eric

P.S. You can help me get this important information in front of people by “Liking” and “Sharing” this post. Who do you know that needs a mortgage and has home buying questions? Please don’t hesitate to contact me directly if there is anything I can do for you or anyone you know.

© 2017 Eric Leigh. All rights reserved.




New Conforming Loan Limits in 2017

New Conforming Loan Limits in 2017

The Federal Housing Finance Agency (FHFA) announced new maximum loan limits for conforming loans acquired by Fannie Mae and Freddie Mac. This is the first increase since 2006.

Effective January 1, 2017, the maximum loan limit for one-unit properties in much of the country will be $424,100, up from $417,000. Higher loan limits will be in effect in higher-cost areas. New loan limits, however, will not take effect in 87 counties around the country.

What prompted this change?

The baseline loan limit of $417,000 was established by the Housing and Economic Recovery Act of 2008 (HERA). The law requires that this loan limit be adjusted each year to reflect changes in the national average home price.

FHFA’s most recent third quarter Home Price Index report showed average home prices have risen about 1.7 percent above where they were in the third quarter of 2007, prompting an equivalent increase in loan limits.

With home prices on the rise, the conforming loan limit increase opens up opportunities and helps keep home loans more affordable for more Americans.

If you’d like to learn more about these new loan limits or other loan products, please get in touch with me today. I’m happy to help!

On your team,

Eric

P.S. You can help me get this important information in front of people by “Liking” and “Sharing” this post. Who do you know that needs a mortgage and has home buying questions? Please don’t hesitate to contact me directly if there is anything I can do for you or anyone you know.

© 2016 Eric Leigh and Vantage Production, LLC. All rights reserved.




FHA Changes: Credit Requirements Eased for Some Borrowers

FHA Changes: Credit Requirements Eased for Some Borrowers

Housing Shines BrightlyThe Federal Housing Administration (FHA) announced over 60 loan guideline changes and clarifications, effective September 14, 2015. Many factors will be impacted by these new guidelines, including charge-off accounts, late payments, self-employed borrowers who have experienced a drop in income, and more.

Why is this important? While the changes are subject to lender approval, some of the new rules may make it easier for borrowers to qualify for an FHA loan.

FHA loans are insured by the Federal Housing Administration and are open to all qualified home purchasers. While there are limits to the size of FHA loans, they are generous enough to handle moderately-priced homes almost anywhere in the country. FHA loans also offer low down payment options and more flexibility than many other types of financing.

The Bottom Line
These are just some of the reasons that FHA loans are a great option for many people. If you’d like to find out more about FHA loans, or if you have any questions about the recent changes, please don’t hesitate to contact me directly. I’m happy to help!

On your team,

Eric

P.S. Your referrals to me are the lifeblood of my business. Please don’t hesitate to contact me directly if there is anything I can do for you or anyone you know.




Common FHA Myths

About MortgagesFHA mortgages are one of the most misunderstood loan programs available. Realtors® and homeowners alike that I work with often contact me with the same, similar questions regarding common “myths” about the FHA program. Let”s talk about the most common myths that I hear about regarding FHA mortgage loans.

MYTH: FHA Loans Are For First-Time Homebuyers Only

FHA loans can be used by all homebuyers. I think that this myth stems from the marketing of FHA loans as a good product for first-time homebuyers because of it”s low downpayment requirements. FHA loans are available for any primary residence and are not limited to first-time homebuyers.

MYTH: FHA Loans Require 20% Downpayment

FHA mortgages require a minimum of 3.5% downpayment for the loan. This low downpayment requirement makes FHA one of the most lenient loan programs available. FHA also allows the 3.5% downpayment to come from a family member”s gift and other approved, downpayment assistance programs.

[FHA interest rate as of 9/3/13: 4.25% (5.788% APR) APR based on a 30-year loan of $250,000 with a 1% origination fee and a fixed rate of 4.25% with FHA/HUD mortgage insurance required for the life of the loan. Repayment term would be 360 monthly payments of $1,530.42 each (includes FHA mortgage insurance monthly premium). Click here for a more detailed mortgage rate update.]

To be clear, there are other low downpayment mortgage options as well. The USDA Rural Development mortgage allows for no downpayment financing for the purchase of homes in predefined, semi-rural to rural areas. The VA loan for military borrowers also allows for no downpayment financing. Fannie Mae and Freddie Mac also offer Conventional mortgage loans with a low downpayment requirement.

[These downpayment requirements are accurate as of the date of this norgesbesteonlinecasinoer.com Blog post and are subject to change in the future]

MYTH: FHA Loans Require High Credit Scores

FHA actually has some of the most forgiving credit score and credit history requirements. Borrowers with short sales or foreclosures in the past can often purchase with an FHA loan much sooner (in just 3 years after the short sale or foreclosure) than with Conventional loans.

Although not everyone will qualify for an FHA loan, you most certainly have a better chance to be approved if you have “less than perfect credit” in your recent past.

MYTH: FHA Loans Are Very Expensive

This myth is semi-truth. FHA loans can be more expensive OR less expensive than other loan programs. The true cost of the loan is determined by downpayment and loan size.

Most don”t realize this, but the most expensive part of FHA mortgages is the mortgage insurance (MI). FHA MI premiums are paid by the homeowner to FHA to insure the loan against default. FHA MI is paid in two different ways: 1) Upfront MI premiums paid at closing, and 2) Annual (paid as part of your monthly payment) MI premiums.

Whether or not FHA MI is more expensive than Conventional PMI (Private Mortgage Insurance) depends on many different factors, including your credit score and amount of downpayment you plan to make.

As always, I”m here and available to answer any questions you have about any mortgage program. Feel free to contact me directly at any time!




FHA's Back To Work Program

FHA Credit Policy Change Makes it Easier to Qualify

Understanding MortgagesEffective immediately, policy changes in the way the Federal Housing Administration (FHA) views certain derogatory credit will make it easier for some borrowers to qualify for purchasing a home. Allowances will be made for certain “Economic Events” resulting in poor credit ratings, which previously would cause borrowers to be ineligible.

What do the new rules say? Potential borrowers who experienced a decrease of income by 20 percent or more for at least six months, and that resulted in serious derogatory credit such as a short sale, foreclosure, or bankruptcy, may still be eligible as long as:

  • The loss of employment or income was due to an extenuating circumstance beyond his or her control and can be documented;
  • A satisfactory credit history has been restored for a period of 12 months; and
  • Housing counseling has been completed.

I want to put a word of caution out that how we can document an “extenuating circumstance beyond his or her control” is Hvis du har sporsmal eller kommentarer sa ikke nol med a kontakte oss pa contact@ Casinoonline . still not very clear at this time. To me, it is clear that bankruptcies, short sales, and foreclosures surrounding a divorce do NOT apply here. We are still waiting for more clarification from FHA and investors on this. Rest assured that I will update you with more information as this program ramps up.

Other changes effective October 15, 2013 include amendments to underwriting guidelines in the area of outstanding, prior judgments and collections, including the exclusion of unresolved medical collections from the underwriting decision.

If you or anyone you know has been previously denied for a home loan based on an isolated credit incident, I may be able to help! And I”m always happy to answer any questions you may have. Feel free to email or call me at any time.




No Down Payment Financing With USDA Rural Housing

Most people I talk to have never heard of the USDA Section 502 Guaranteed Program. So if you have no idea what I’m talking about when I mention this program…don’t worry, you’re definitely not alone. Most people just refer them to as “Rural Housing Loans” or “Rural Development Loans”.

Rural Development (RD for short) loans can be used to purchase or refinance an existing mortgage.These loans have no downpayment requirement, no prepayment penalties and very affordable monthly mortgage insurance. The mortgage insurance has a 2.00% upfront fee (based on loan amount) paid at the time of loan closing and a 0.40% annual fee (based on loan principal balance). (A-33) When comparing the RD mortgage insurance to FHA, which charges 1.75% upfront and as much as 1.55% annually, RD loans clearly become a much more affordable loan option.

RD mortgage guidelines are easy to understand, but you AND your home must qualify. Here are some of the most common RD questions I’m asked by Realtors® and mortgage clients I work for:

How much money do I have to put down for an RD loan?

Although you can choose to put money down, there is no downpayment requirement with RD.

Is the RD loan just for first-time homebuyers?

No…it can be used by anyone that qualifies.

How do I know if my home is in an area that is eligible for RD?

On the USDA website there is a tool that you can do an eligible property search. Please know that as of October 1, 2013, some properties that are currently eligible for an RD loan will no longer be eligible. Please see my previous post or call me for details.

How much are closing costs on these loans and can I have gifts to pay closing costs?

Closing costs will vary widely by the lender you select. RD loans do allow documented gifts. Ask your loan officer about this or Contact Me for more information about this.

Can I use RD loans to buy investment property?

No. RD loans are exclusively for primary residence occupancy and cannot be used to purchase second homes/vacation homes or investment property.

As always, my door and phone are always open for you and your mortgage scenario questions. Please feel free to contact me directly if I can be of further assistance to you with an RD loan or other mortgage scenario.

Mortgage guidelines can change at any time. The information in this post is accurate as of the date it was posted.



USDA Eligible Property Update

USDA Eligible Properties Saved From 1st Quarter 2013 Cut

Cities remain USDA Eligible until September 2013

USDA and Rural DevelopmentThere’s good news for people living in areas that qualify for USDA loans. A list of 923 communities that were set to be cut from the USDA’s list of Rural Development eligible areas will now remain eligible until later this year, on September 30, 2013.

What does this mean? There will be no changes to the communities that are currently eligible for the USDA Section 502 Guaranteed Program. In other words, cities that were included in the previously released “cut list” will continue to be eligible for USDA financing until the new deadline.

USDA Rural Development and its loan program were designed to help improve the economy and quality of life throughout rural America. (O-73) The program continues to remain a wonderful option for qualifying homebuyers, with zero down payment required.

For a complete list of the Rural Development eligible communities and for information about qualifying loan programs, consult this link:

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

If you or anyone you know is interested in a USDA Rural Development guarantee loan, I would be glad to help and am always happy to answer any questions you may have!

For those of you in the Boise, Idaho area where I live and primarily work: Kuna is set to become INELIGIBLE for Rural Development mortgage lending after September 30, 2013.




Choosing a Fixed Rate Mortgage

The vast majority of my clients who come to me for mortgage service and advice are only interested in a fixed rate mortgage. I can”t blame them…as of this post, mortgage rates are at or near HISTORIC lows. It”s an incredible time to purchase or refinance because the mortgage money is so cheap right now.

Fixed rate loans now come in many different types. Generally, my clients are picking from one of two options; the 30-year fixed and the 15-year fixed (we also do 20- and 25-Year fixed mortgages). If a borrower is planning on being in the same home for a long period of time, a 30-year fixed may be more attractive because it offers stability. The monthly payment will remain consistent over the life of the loan. If interest rates are at historic lows at the time the borrower is seeking to obtain financing, this is a casino online good program to consider.

A 15-year fixed loan program offers the same stability, but the accelerated amortization schedule makes the monthly payment substantially higher. While the interest rate may be lower on this type of loan, the borrower must be willing to commit to a higher monthly payment. If the borrower wishes to retire in 15 years and be debt-free at that time, this loan program may be more suitable to the borrower”s long-term needs.

It is also possible to make pre-payments on a 30-year loan and reduce the life of the loan, as well as the overall interest payment, without committing to the higher monthly payment of a 15-year program. As long as there is no pre-payment penalty associated with the 30-year mortgage, pre-payment offers the borrower the latitude to make additional payments when it is affordable. If cash flow becomes difficult, this arrangement will not put the borrower in a compromising position.

As always, my door and phone are always open to you if you have questions about your current mortgage or would like a complimentary mortgage consultation about a new loan you are considering. Call me (208-880-0316) or email me at any time…I”m here to help!




Bi-weekly Mortgage Programs

Bi-weekly Mortgage Programs

Should you do this…or do this on your own?

 

 

Bi-weekly mortgage payment programs can save you money. Did you know you can easily do the same thing on your own and be able to keep your money in your control all the time?

Please feel to LIKE, SHARE, and forward to your friends who could use this information.

 

 




Bi-Weekly Mortgage Programs

What are the Pros and Cons of Bi-Weekly Mortgage Programs?

 

Many of my clients ask me about whether or not it is smart to enter into a contract to make bi-weekly payments on their mortgage. Do you know what this means?

In a bi-weekly mortgage program, the amortization schedule is accelerated. For example, with a 30-year amortization schedule, the borrower makes 12 payments per year. In a bi-weekly arrangement, the borrower makes 26 ‘half’ payments, which allows the loan to be paid off in 22.8 years instead of 30 years. It’s the same as making 13 monthly payments.

On the surface, this is great for my clients. This ultimately saves them thousands of dollars in interest rate fees. However, bear in mind that bi-weekly programs usually have some type of setup, transaction, and maintenance fees associated with them. A custodian manages the bi-weekly payments in a trust account (and also makes a profit on the interest accrued there). Because the lender really doesn’t accept partial payments, this middle man is still making monthly payments to the lender on some type of pre-payment schedule.

It is important for you to know that you can achieve the same results without hiring an outside company to do this. As long as your loan program carries no pre-payment penalty, pre-payments can be made on a monthly or annual basis to shorten the loan term to save money on interest or remove PMI charges on loans that have less than a 20% down payment. How do you do this? Simply indicate the extra payment is being made toward the principal balance, and have the discipline to make these extra payments as scheduled. (A-39)

For more tips and ideas on mortgage planning, email me directly or give me a call (208-880-0316). I’m here to help!