Loan (Photo credit: Philip Taylor PT)
Effective June 11th 2012, any FHA loan originated prior to June 1st, 2009 will be eligible to do a streamline refinance at reduced fee. Currently a borrower will pay a 1.75% upfront mortgage insurance fee no matter how long the loan has been with FHA. Starting June 11th FHA will start basing these fees on how long you have been an FHA customer. For the loans that are originated prior to June, 1st 2009 the upfront fee will only be 0.01 percent of the loan amount. For all first time home buyers and FHA customers who received their loans after June 1st 2009 the upfront fee will remain 1.75%.
The other component of mortgage insurance on a FHA loan is the annual insurance that you pay each year. Currently if your term is greater than 15 years (20,25,30 year loans) your annual mortgage insurance rate is 1.25%.
Example : ($100,000 total loan amount) multiplied by 1.25% = $1250.00 annual mortgage ins. You would the take your $1250.00 annual fee and divide over 12 months =$ 104.17 $104.17 is the amount you will pay on top of your principle and interest payment each month.
A complete schedule of current annual mortgage insurance based on the term and the loan to value ratio(loan divided by appraised value) is below.
New Annual Mortgage Insurance Premium Schedule for loans originated after June 1st 2009.
The MIP schedule for FHA loans with terms greater than 15 years (e.g.; 20-year fixed FHA, 30-year fixed FHA) is as follows :
The schedule for FHA loans with terms less than or equal to 15 years (e.g.; 15-year fixed FHA) is as follows :
Those customers who borrowed their FHA loan prior to June 1st 2009, will have reduced fee on the annual mortgage insurance premiums. A complete schedule is listed below.
New Annual Mortgage Insurance Premium Schedule for loans originated prior to June 1st 2009.
Beginning June 11, 2012, if you’re replacing an FHA mortgage endorsed prior to June 1, 2009, and your new FHA mortgage has a term greater than 15 years (e.g.; 20-year fixed FHA, 30-year fixed FHA), your new loan’s MIP schedule is as follows :
Or, when the new FHA mortgage has a term of 15 years or fewer (e.g.; 15-year fixed FHA), the new loan’s MIP schedule is :
If your loan was originated prior to June 1st 2009, its possible that a streamline refinance with the reduced mortgage insurance premiums could save you thousands of dollars a year. Streamline refinance are required to have some net tangible benefit to the borrower. Streamlines require reduced documentation for underwriting and generally are done without an appraisal on the subject property.
A FHA loan still remains are very strong option for any buyer who is looking to get into a house with as little down payment as possible. Currently if you have a 640 credit score or higher, it’s possible to get into a house with as little as 3.5% down payment. If you have a score 620 or higher they will require a 5% down payment. It’s important to understand that FHA is able to allow these small down payments due to the upfront and annual insurance they collect on each loan.
If you have any specific question regarding your FHA loan please contact me at benwild@goapmc.com
Logo of the USDA Rural Development office, part of the Department of Agriculture. (Photo credit: Wikipedia)
What is a Rural Development loan or RD loan? Is it a loan to purchase farm land? I believe that is the misconception sometimes. Even though a Rural Development loan is guaranteed by the US Department of Agriculture, it is not a loan for agriculture or farm land. It is a loan for a primary residence in rural communities.
There are several features of this type of loan that are favorable. First off, RD loans require no down payment, the guarantee fee can be financed, monthly mortgage insurance is very low and the interest rate is usually very attractive. The guideline for whether the property would qualify for an RD loan is if it is located in a community with 10,000 population or less. This isn’t always the case so you can also look to see if the property is eligible at http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do go to property eligibility and it will indicate whether it is eligible or ineligible. There are also income guidelines per county and the same site can help you determine if you’re within the income guidelines.
If you enjoy small town living, you should check into this type of loan if you are thinking of buying a home. It may be just the loan for you to bridge the gap to home ownership. For more information on RD loans, contact Jeannie Swords at jeannieswords@goampc.com.
Private Mortgage Insurance with a Conventional Loan is now a much cheaper alternative
to paying mortgage insurance on a FHA loan. Effective on April 9th the Federal Housing Administration increased their up front mortgage insurance to 1.75% and the annual premium to 1.20%. The mortgage insurance is used to protect the Lender in case of default. All FHA loans must carry mortgage insurance regardless of the down payment. If you have 20% down on a Conventional loan mortgage insurance is not required. There are some scenarios where a FHA is still a better alternative such as if the borrower wants to be gifted the 3.5% down payment requirement and has a lower FICO score. Below is a comparison of FHA Mortgage insurance compared to Private mortgage insurance on a conventional loan with a Sales Price of $115,000. This example reflects FHA compared to 2 different ways to finance PMI on a Conventional:
In a situation where the borrower absolutely could not come up with the additional 1725.00 for down payment the FHA may be the only option. If the score is high enough there are available grants for the down payment and some Conventional loans available with 3% down that would require higher private mortgage insurance. Keep in mind the borrower may ask the seller to pay the $2,294.25 for the p front single premium on Conventional . If the scores are acceptable and the borrower has the down payment funds then the conventional loan with a borrower or Lender paid single premium is much more affordable than the FHA option for private mortgage insurance.
(Photo credit: Wikipedia)
Are you a foreclosure victim. Is owning a home something you want to attain again in the future. If so, there is hope but now is the time to start planning and preparing. Depending on the current lending guidelines you have a 3 to 5 year window before you will be eligible for home ownership again. That does not mean that once you are eligible you will automatically qualify.
Being proactive will put you on the path to home ownership again. You can start by finding out what you need to do know in order to repair your credit. You will want to be prepared for what lenders are going to look at when qualifying you after a foreclosure.
All in all if you are a foreclosure victim and would like to own a home sometime in the future, having a plan is a necessity. If you would like more information on creating a plan for home ownership, feel free to contact me at jeannieswords@goapmc.com. I am a certified path2buy coach.
Now you can refinance your mortgage even if your mortgage balance is more than your home’s current value! Freddie Mac and Fannie Mae have adopted changes to the Home Affordable Refinance Program (HARP). If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP. You can determine whether you mortgage is owned by either Freddie Mac or Fannie Mae by checking the following website: www.freddiemac.com/mymortgage or www.fanniemae.com/loanlookup/.
There are special refinance programs available where appraisals are not required for most loans. Home values simply need to be substantiated by recent sales in your neighborhood. So if you are stressed about not having enough equity to refinance and want to take advantage of today’s low rates it may be possible!
For more information call Brenda Wild at 309-781-6274.
HECM for purchase or more commonly known as reverse mortgage for purchase is a
wonderful alternative for our aging population to purchase a home that may be more suitable to their needs as they grow older. They may currently own a home that they have substantial equity in but are unable to physically get around or maintain it in its current condition.
One solution to this would be to sell their current home and use part of their proceeds as a down payment on a reverse mortgage to purchase a home that is being dubbed today as an age in place home. These are homes built to meet the needs of the elderly so that they can continue to live independently well into their mature years.
A reverse mortgage is a non-recourse home loan with no future mortgage payments for people at least 62 years of age.
A reverse mortgage may also be used to refinance a current home in order to turn equity into a performing asset to utilize as retirement income.
For more information on Reverse Mortgages, feel free to contact me for your free information packet at jeannieswords@goapmc.com or 309-781-7110
 | ||||
 | ||||
