closedfamilyHUD Reduces the Cost of FHA Loans.

 

Like the cost of oil the cost of FHA loans is falling. In its first mortgagee letter of 2015, HUD announced that the monthly premium on 30 year fixed rate loans will go down by ½ of a percent (50 bps), starting n loans with FHA case numbers issued after January 26, 2015.

 

 

New monthly MIP premiums:

 

Term > 15 Years
Base Loan Amt. LTV Previous MIP New MIP
≤ $625,500 ≤ 95.00% 130 bps 80 bps
≤ $625,500 > 95.00% 135 bps 85 bps
> $625,500 ≤ 95.00% 150 bps 100 bps
> $625,500 > 95.00% 155 bps 105 bps
Term ≤ 15 Years
≤ $625,500 ≤ 90.00% 45 bps 45 bps
≤ $625,500 > 90.00% 70 bps 70 bps
> $625,500 ≤ 90.00% 70 bps 70 bps
> $625,500 > 90.00% 95 bps 95 bps

 
The reduction in premium translates to a monthly payment reduction of over $83 per month on a $200,000 loan. Home buyers can qualify to purchase larger homes.

 

Combine the MIP reduction with the recent interest rate drop, many folks will save thousands by refinancing, especially those with 30 year FHA loans closed after the spring of 2009. (click here to request information for an FHA Streamline Refinance).

 

www.PaulCantor.info

 

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Many home underwater homeowners with FHA mortgages have not taken advantage of the FHA streamline refinance because their monthly mortgage insurance payment (PMI) would significantly increase due to HUD increasing the premium numerous times on FHA loans in the last 2 years.  Starting today many of these folks will receive a lower monthly mortgage insurance payment on FHA streamline refinances.  HUD has reduced the up front and monthly premium on streamline refinances of FHA loans endorsed by FHA prior to June 1, 2009.  This may mean an FHA streamline refinance will help thousands of home owners refinance and reduce their monthly mortgage payment, even if they have lost equity

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Today we conducted the last scheduled HARP 2 seminar / webinar.  Here are some of the common questions raised from attendees over the last 3 weeks and our answers.  Remember these answers are valid as of today and may change:

 

What are the two minimum requirements for a mortgage to eligible for a HARP refinance?     

(1)     Loan must be backed by Fannie Mae or Freddie Mac.  (2) Loan must have a securitization date prior to June, 2009

 

How do I find out if my loan is a Fannie Mae or Freddie Mac loan?

Use a web based look-up tool: 

www.fanniemae.com/loanlookup

www.freddiemac.com/mymortgage 

 

If neither Fannie Mae nor Freddie Mac has a record of my mortgage, do I have options?

Yes.  These include a traditional refinance and FHA streamline refinance.

 

If I refinanced with HARP, can I refinance with HARP II?

No.

 

Is my current lender the only lender that can refinance my mortgage under HARP?

No.

 

I pay PMI now. Can I refinance under HARP II if my loans balance is greater that the home value?

Most Likely.

 

Can I refinance a rental property or vacation home with HARP?

Yes.

 

Can I refinance a two unit property with HARP?

Yes.

 

Does HARP allow loan balances to increase, so that I do not need to bring funds to closing?

Yes.

 

Are VHDA mortgages eligible for HARP 2 refinances?

No

 

These and many other issues were covered at these events.  If we see a strong demand we may repeat them live or via the internet.

 

Click here to discuss a HARP or other refinance with a TrustMor loan officer.

 

 

 

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Buying a home is getting less expensive for Veterans.  Effective for Veteran Affairs (VA) loans closed on or after October 1, 2011, the VA funding fee will change.

According to VA Circular 26-11-12, changes in the VA funding fee are prompted by the passage of Public Law 112-26, Restoring GI Bill Fairness Act of 2011, and other previous legislation. The following chart is a list of the current and new VA funding fees scheduled to take effect on October 1, 2011.

 

Use/Purpose

Down Payment

Active Duty Veteran

Reservist/National Guard

Current

New

Current

New

First Time Less than 5%*

2.15%

1.40%

2.40%

1.65%

First Time 5% – 9.99%

1.50%

0.75%

1.75%

1.00%

First Time 10% or more

1.25%

0.50%

1.50%

0.75%

Subsequent Less than 5%*

3.30%

2.80%

3.30%

2.80%

Subsequent 5% – 9.99%

1.50%

0.75%

1.75%

1.00%

Subsequent

10% or more

1.25%

0.50%

1.50%

0.75%

Interest Rate Reduction

N/A

0.50%

0.50%

0.50%

0.50%

Assumptions

N/A

0.50%

0.50%

0.50%

0.50%

*Includes “Cash-Out” Refinancing Loans

More information on mortgages for Veterans.

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Yes seniors may purchase a home and have no monthly mortgage payment.  This is possible with a reverse mortgage (also known as a Home Equity Conversation Mortgage (HECM))

Here is an example for a 69 year old buying a home.

 

Purchase Price = 200,000

Amount of FHA reverse mortgage  =  $132,600

Funds needed a closing = $68,000

Monthly Mortgage Payment =   $0.00

 

Assumes the seller will pay all closing costs on a fixed rate reverse mortgage.

For more information on a reverse mortgage call (804) 433-1510 or click here.

 

 

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Yesterday HUD (FHA) released their monthly report for December 2010.  This report shows REO (Real Estate Owned / Foreclosed properties) up 9.5% from November.

Combined REO for for Fannie Mae Freddie Mac & FHA was at 293,171 units at the end of 3rd quarter for 2010.  Fannie Mae & Freddie Mac have not yet reported 4th Quarter numbers.

Take a look at this graph.

This means homes are on sale for discounted prices.  Thinking about buying a home?  Now is a good time to look, it is a buyer’s housing market.

To get pre-approved for a purchase Click here.

www.PaulCantor.info

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Considering an FHA loan to buy or refinance a home? If so you should move fast. HUD has announced new annual FHA mortgage insurance premium (MIP) rates starting April, 2011. This means that the initial payment on FHA mortgages will feel like the note rate has increased .25%. These new monthly premiums are double what they were last year.

New FHA Annual Mortgage Insurance Rates

The following is the table for the new rates

Transaction Type LTV Loan Term UFMIP Annual MIP(% ÷ 12)
PurchaseStreamline (All Types)

Rate-Term Refinances

<= 95% > 15 Years 1.00% 1.15%
> 95% > 15 Years 1.10%
<= 90% <= 15 Years 0.25%
>= 90% <= 15 Years 0.50%

This may mean it may be harder to qualify to purchase a home and some FHA Streamline refinances will not make sense.

Apply for an FHA mortgage

If you are thinking of buying your first home or refinancing your current FHA loan with a streamline refinance start by sending a email by clicking here an email by clicking here..

Paul Cantor
(804) 719-1515

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FHA announced the extension of the anti-flipping wavier through the end of 2011.  This will help stabilize the market and make financing foreclosed homes easier..

FHA regulations typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days.   FHA today posted a notice extending this waiver through the remainder of 2011.  The wavier allows buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales..

Read the full notice.

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The House and Senate both approved H.R. 3081 which included the extension of the increased conforming loan limit in high cost areas. This extension covers conforming loans limits that are backed by Fannie Mae, Freddie Mac and FHA (Federal Housing Administration) and will be in effect through the new fiscal year which ends September 30, 2011.  The maximum amount of conforming and FHA loans will remain as high as $729,750.  Here are some of the conforming loan limits in Virginia:

.

Richmond City MSA $528,750
Washington DC Metro $729,750
Charlottesville MSA $425,000
Winchester MSA $475,000
VA Beach/Norfolk MSA $428,750

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It is expected that President Obama will sign the legislation.

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www.paulcantor.info

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Beginning this week, Fannie Mae and Freddie Mac are trying to sell off 150,000 foreclosed homes by offering low down payments, no requirement for mortgage insurance, and up to $30,000 added to the mortgage for renovations. In addition, the real estate practitioner selling the property gets a $1,500 bonus.
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In some neighborhoods, these properties undercut the average listing by $100,000.
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Fannie and Freddie already have repaired the biggest problems with the property including roofs, plumbing, and electrical work.
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Buyers who plan to live in the properties get a 15-day chance to view the homes before investors can purchase them. Investors with cash will likely snap up any properties remaining at the end of the grace period.

“Our goal is to recover as much as we can to offset our loss and not to be low balling properties just to move them,” says a Freddie Mac spokesperson. “We absolutely have no motivation to be leading a downward spiral in home prices.”
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Source: Smart Money, Anna Maria Andriotis (09/28/2010

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