Ready Bell Home Loans @ Mason McDuffie Mortgage » FHA loans

FHA News: Mortgage Insurance to increase

readybell — Sun, 20 Feb 2011 19:25:05 +0000

FHA NEWS

As of April 18^th, 2011 FHA will once again be INCREASING their monthly mortgage insurance premiums. What this will look like in $

Example: $400,000 loan, less than 5% down, 30 year loan

Current monthly Mortgage Insurance: $300

New April 18^th monthly Mortgage Insurance : $366.67

That is over a 20% increase!

That is an additional $800 per year in this scenario.

I would strongly suggest you

1) Have your borrowers qualified under upcoming changes and explore other loan programs

2) Encourage your FHA buyers to get serious now. They will need to be in contract prior to April 18^th to avoid these changes.

The deal with 2nd approvals

readybell — Tue, 01 Feb 2011 17:13:46 +0000

Why certain properties require a 2nd approval by the sellers preferred lender:

1) If it is a bank foreclosure asking you to qualify through their bank, They are requiring this because:

A) They want one of their people to check you out to make sure you are really qualified. Sadly, a large percentage of pre qualification or pre approval letters are not worth the paper they are typed on. Some lenders do not even run credit before they say you are pre approved!

B) They want an opportunity to get your loan business. Banks make money off of each loan they close.

C) If the bank approves you and you go with another lender and the loan “blows up” you can go back to the bank and they can close the loan for you. Remember they already approved you.

2) It it is a foreclosure asking you to get a 2nd approval through their preferred lender. This means that the foreclosing entity and lender are not in the same company.

A) They want a lender they trust to go through your file to make sure you have the ability to close the purchase because of reasons mentioned in 1A

B) They make absolutely no additional money if you use their preferred lender. They do get peace of mind which can be priceless.

C) They know if their preferred lender does the loan it will close. If you use another lender and it “blows up.” you can go back to the preferred lender to close the deal and rescue the deal.

D) Certain financing is available on certain types of foreclosures. Very few lenders take the time to learn “niche” loans which is another reason you will see a preferred lender. The preferred lender knows how to do the unique financing.

Note:Due to the complicated nature of financing these days we are seeing preferred lenders on both short sales and regular sales now too.

Lenders’ perspective: I am fine with the 2nd approval process. I am happy to call the other loan agent and see what they need and get it over to them as quickly as possible. It is the nature of our business right now. Also, they are providing a complimentary service for my client. They are providing options. I am always suspect of lenders that dislike this process. It is really not that much extra work. It makes me wonder why they do not want their clients to have additional options.

5 2011 Predictions; Crystal Ball edition

readybell — Fri, 07 Jan 2011 16:58:00 +0000

The last few years have been a roller coaster for everyone in the real estate market.

Expect:
1) An emotional yet controlled recovery:
The emotional aspect: If you read the business section you can see the view on the recovery swing rapidly from day to day. On Monday we are recovering and on Tuesday the market is being hailed as the next big depression. On Wednesday everything is sunshine and rainbows and on Thursday we are doomed. There is a lack on consistency in mood. This is what we call an emotional recovery. Every speck of data is sending the media and emotional investors to the extreme on each side. It is manic depressive to say the least.

You can take advantage of this by investing when they say it is the end of the world. It is amazing some of the deals on solid companies that have been offered up in the last 36 months due to doomsday news. It is a great time to start saving for retirement or increasing your retirement savings. Rates also will go up and down with the news. Quick cheat sheet below
Great Depression = lower rates Recovery= higher rates

The Control Factor: This recovery is being controlled and pushed along by the government and the “powers that be.” Look at the housing issue. Our country cannot afford to let the foreclosures all hit the market at once. There are just too many. This happened in 2008 and it devastated home values and threw the economy into the dump. Since the 2008 free for all, there has been a much more controlled release of foreclosures. Between the attempts at modifying, moratoriums and behind the scenes deals we have been seeing foreclosures come out in a low controlled movement. Expect this to continue. The flood of 2008 will not happen again. It will be the trickle of 2011,2012,2013 and 2014. I say no to the double dip.

2) The Year of the Short sale:
Short sales are speeding up a little bit which is great but what is even greater is that in the past few months we have seen more and more buyers actually wanting to buy a short sale. In the past people were hesitant due to all the unknowns involved. However, short sales in many cases are now priced more aggressively than foreclosures, there is more short sale inventory and lenders are more willing to approve them. Also, there is new legislation in CA that makes it more attractive for homeowners to short sale their homes.

3) Lending to loosen a bit: We are starting to see the beginning of slightly looser lending. Debt ratios are not loosening up but some of the documentation is. Stated is still a far way from coming back although there are some hard money sources offering stated income as long as there are assets. We are starting to see more products coming into the market and more investors wanting to do local deals that are unique. A big part of our 2011 plan is trying to say yes twice as much as we say no.
4) Modifications to remain problematic: The way in which modifications are being handled is so poor that I have absolutely no hope that it will be fixed by the end of 2011. For example, I was reviewing a friends credit report who was going through a modification and even though they had made their modification payment every month on time their credit history showed 7 lates due to partial payments (the modification payment). Their score had dropped from 780 to 540. They did everything right and their credit was hit harder than if they had done a short sale. Bank of America is being sued by a few states over their modification processs and their have been countless stories of modifications gone bad. The bottom line is that the servicers make more money by foreclosing or a short sale than they do by modifying. Until this is changed expect modifications to remain useless for the masses.

5) Foreclosures are here to stay: There will not be a flood but the trickle will continue. There will continue to be some great foreclosure deals.

For buyers and investors 2011 will be a year filled with opportunity. For everyone hoping they can gain equity to refinance their house we are still a few years off. I do still hope that a no equity refinance will be introduced but I am not holding my breath.

How to take advantage of Todays great rates when you have less than 20% equity in your home without paying mortgage insurance

readybell — Sat, 13 Nov 2010 15:50:13 +0000

How to take advantage of Toady’s great rates when you have less than 20% equity in your home without paying mortgage insurance. Part One

Many people feel that if they have less then 20% equity in their home they cannot refinance without paying mortgage insurance thus defeating any savings from refinancing. They are often told this by loan consultants or brokers. This is not always true. Let me demonstrate

FHA 15 year fixed:
If you owe $90,000 on a $100,000 home and you only have one loan, your loan to value is 90%. Under FHA guidelines if you are refinancing or purchasing a home and you do a 15year fixed as long as your loan to value is below 90% you DO NOT PAY MONTHLY MORTGAGE INSURANCE. You would pay the 1 percent upfront fee for FHA that is financed into the loan but no mortgage insurance. With rates as low as 3.875% with no points this can be a life saver for borrowers who want to get a low rate and pay their loan down quicker but lack sufficient equity to go conventional without mortgage insurance. This is also great for borrowers with lackluster credit. FHA does not penalize you with a higher rate is your credit is less than perfect.

New Loan Program. Only 1/2% down on FHA.

readybell — Fri, 12 Nov 2010 15:44:53 +0000

.5% down on FHA loan. Yes, that is right only .5% down

We have a new loan we are very excited about. Everything great except you are a little short on the downpayment or closing costs? Check this out

This is a great program for borrowers who need help with the down payment or closing costs.

Brief overview: This loan is sponsored by the CRHMFA Homebuyers Fund and administered by the National Homebuyers fund to assist low to moderate California residents to purchase homes. Low to moderate income in Sonoma and Marin is over 100,000 per year!
The program offers a 3% grant towards down payment or closing costs.

Rules about Grant Funds:

· May not exceed 3% of the first mortgage loan amount

· Proceeds may be used only for down payment or closing costs

· No cash back to borrower

· This is a grant. There is no recapture and no second lien attached to the property. The grant is easy to get. We basically reserve the funds not like some grants that are daunting and time consuming

Borrower Eligibility: Basic FHA+

· Owner occupied only. No non occupant co borrowers

· Income limits. Income cannot exceed CHF income limits for the county property is located in.

Check limits at http://www.nhfloan.org/programs/CHF_Platinum/Platinum_IncomeLimits.pdf

Other Notes:

· Single Family only

· 30 year fixed only

· Loan cannot exceed $417,000

· Rates are higher then normal FHA.

We are happy to see if your clients qualify for this program or to answer any questions you may have.

Let us know how we can help

Jennifer Ready 707-478-0637

FHA loan update; Need 640 credit score for most lenders

readybell — Thu, 11 Nov 2010 15:42:52 +0000

In the past few weeks we have seen one bank after another raise their minimum credit score on FHA to 640. Two weeks ago we had 7 main lenders that would allow 620 credit scores.
Today = zero
Why are lenders tighten up while the economy is recovering (as per some media reports)?

Welcome to a preview of 2011. The hushed word on the street is we will see FHA and Freddie Mac tighten up more and Fannie Mae may loosen up a bit. One hand giveth and the other taketh away.

Bottom line: Credit is crucial and will continue to be so for 2011

FHA VS Homepath

readybell — Wed, 22 Sep 2010 18:35:05 +0000

FHA (with new rules) VS Homepath

In a prior blog I discussed how FHA was changing October 4th and how this would affect monthly payments. For reference check out FHA Oct4th. These changes will make Homepath more competitive with FHA. Prior to October 4th FHA beat Homepath in monthly payment due to Homepath’s higher rates. As of October 4th Homepath is competitive.

NEW AS OF OCTOBER 4TH FHA Cost:
Purchase Price: $400,000
3.5% down: $14,000
1% upfront MI fee: $4000 Total Loan amount: $389,860
Principal and interest: $1997.14 (rate est 4.375% no points)
Taxes (estimated): $322
Insurance (estimated): $80
Mortgage Insurance: $287.52
Total Monthly payment: $2686.66

HOMEPATH has no mortgage insurance
Purchase Price: $400,000
3% down: $12,000 down
Total Loan amount: $388,000
est interest 5.125% with one point
Principal and interest: $ 2112.61
Taxes (estimated): $322
Insurance (estimated): $80
Total Monthly payment: $2514.61

Mortgage Rates have hit a new low

readybell — Thu, 02 Sep 2010 19:18:53 +0000

As we open in September it is looking to be a great month for extremely low rates. We have hit a new low. Yes rates have been low but now they are even lower. We are quoting in the LOW 4′s for 30 year fixed loans and the high 3′s for 15 year fixed loans. ARMS are in the 3′s. Now is the time to refinance and to buy. Borrowing $ has become extremely affordable. Call or email us today to see how these new low rates can benefit you.

FHA new COSTS. What this means

readybell — Wed, 11 Aug 2010 22:47:52 +0000

FHA is the single hottest loan in Northern California. With a limited amount required down (3.5%) and more relaxed income and asset requirements FHA is the way most new Homebuyers are going. As of October 4th the cost of having an FHA loan will INCREASE MONTHLY for the first 5 years.

Let’s look at the math for a 30 year fixed FHA loan at 4.875%

Current rules FHA Cost:

Purchase Price: $400,000

3.5% down: $14,000

2.25% upfront fee: $9000

Total Loan Amount: $394,685

Principal and interest: $2088.71

Taxes (estimated): $322

Insurance (estimated): $80

Mortgage Insurance: $175.70

Total Monthly payment: $2667.33

NEW AS OF OCTOBER 4TH FHA Cost:

Purchase Price: $400,000

3.5% down: $14,000

1% upfront fee: $4000

Total Loan amount: $389,860

Principal and interest: $2063.17

Taxes (estimated): $322

Insurance (estimated): $80

Mortgage Insurance: $287.52

Total Monthly payment: $2753.61

Although the monthly payment is higher for the first 5 years (You have to pay mortgage insurance for 5 years) with the new rules if you keep the loan for the full 30 years you will actually save about $2485. Where this will become an issue is with “cusp” borrowers. Borrowers who were max qualified at a certain amount will now qualify for less.

Written by Jennifer Ready www.Readybell.com

Most important mortgage news this year

readybell — Thu, 03 Jun 2010 23:57:04 +0000

If you are purchasing or refinancing a home with a loan (not FHA)

DO NOT BUY ANYTHING WITH YOUR CREDIT CARDS.

As of June 1st Fannie Mae is requiring lenders to check the borrowers credit right before funding. If anything changes on your credit your loan that you already have signed loan documents on could be denied. In order to protect yourself

1) DO NOT BUY ANYTHING WITH YOUR CREDIT CARDS OR OPEN NEW LINES OF CREDIT.

2) PAY YOUR CREDIT CARDS ON TIME

3) DO NOT ALLOW ANYONE TO RUN YOUR CREDIT.

By following the three above rules you will have no problems. If you decide to go against any of the above you could be setting yourself up for disaster.