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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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:

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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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Considering an FHA loans to purchase or refinance your home.  Contact your Loan Officer prior to October 4th.  We’ve been talking about, The new hidden price on FHA loans that is equal to a rise in the mortgage interest  rate of one-third of one percent.  This may make the difference on whether someone will be able to qualify to purchase a home or not purchase a home.  It will also make the payment on FHA refinances higher:

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Upfront Premiums (Case Numbers Issued 10/04/2010 and later):

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October 4, 2010, for FHA traditional purchase and refinance products, the upfront premium, shown in basis points below, will be charged for all amortization terms.

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Mortgage Type Upfront Premium Requirement
Purchase Money Mortgages and Full-Credit

Qualifying Refinances

10013PS
Streamline Refinances (all types) 100 BPS

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Annual Premiums

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Effective for FHA loans for which the case number is assigned on or after

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October 4, 2010, FHA will increase the annual premiums collected on a monthly basis. For FHA traditional purchase and refinance products, the annual premium, shown in basis points below, is to be remitted on a monthly basis, and will be charged based on the initial loan-to-value ratio and length ol’the mortgage according to the following schedule:

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LTV Annual Premiums for Loans > 15 Years
= or < 95 percent 85 BPS
>95 percent 90 BPS

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The annual premium for amortization terms equal to or less than 15 years remains unchanged and is collected according to the following schedule.

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LTV Annual Premiums for Loans = or < 15 Years
= or < 90 percent -None
>90 percent 25 131’S

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Cancellation of FHA’s Annual Mortgage Insurance Premiums

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The cancellation policies defined in Mortgagee Letters 2000-38 and 2000-46 remain unchanged.

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Yes many home owners who owe more on their homes than the value of their homes are able to refinance at today’s low mortgage rates.  FHA streamline refinances are available without requiring an appraisal and without documenting income (employment is verified).  Also Fannie Mae is allowing many of the loans it holds to refinance without a new appraisal through the Fannie Mae Refi Plus program.

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Go ahead check into it while rates remain low.

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www.paulcantor.info

e-mail Paul

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