April 2010

Reverse Mortgage Purchase For MN Seniors

Yes IT IS being done!!  A reverse mortgage purchase using the FHA HECM loan.  We’re doing them at Venture Development.  We put together a power point on it for your review.  http://www.slideshare.net/mnguru/reverse-mortgage-purchase-senior-mortgage This is another interesting way that homes can be sold and buyers can achieve a housing payment that works for them.

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FHA 203K–For Remodel or purchase

As a Minnesota mortgage broker, we have investors who will fund the FHA 203k program.  Not every lender will allow for a 203K, as they require more paperwork and have more responsibility associated with them.  That being said, you will want to explore the 203K loan if you want to make some updates or remodel to an existing or new purchase.  I have run across a very knowledgeable 203K consultant.  You will definitely want to check out his site as well at: http://203kloanmn.com/about-203k-loan-minnesota When you are ready, call us and let’s begin your mortgage paperwork (we broker loans throughout Minnesota).

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FHA Short Sales-ALLOWED

Many people mistakenly think short sales can’t or won’t be done on FHA insured loans.  THIS IS NOT TRUE
Here is the link to the HUD pdf which outlines their current program guidelines:  http://www.hud.gov/offices/hsg/sfh/nsc/rep/pfsfact.pdf If you are in Minnesota and your home is within the 7 county metro area around the Twin Cities, we can help you list your home and do a short sale.

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FHA Credit Score Changes

FHA is thinking about changing their minimum credit score requirements for loans. In the meantime, lenders are adding their overlay on top of FHA. So, what this means is that although a loan will eligible for FHA insurance with a score of 580, they may impose a minimum of 640. MOST lenders today are 620. Many are moving to 640 and even 680!! This is why it is important to work with a broker that has a number of outlets. Otherwise, you may be told “NO” by your favorite lender on the street corner, when you could have been told “YES” and taken advantage of the low interest rates, tax credits and other incentives.

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FHA ARM’s are AVAILABLE

Many lenders/brokers are not offering the FHA ARM. WE DO!!!. FHA ARM’s adjust 1 percent per year, once per year, with a lifetime maximum adjustment of 5% over the start rate. Let’s look at a WORST case example. Lets start a 4% year 1. Upon adjustment with worst case, we’re looking at yr 2- 5%, yr 3- 6%, yr 4-7%, yr 5-8%, yr 6-9%. As with all ARM’s there is a formula to make the adjustment based on adding a margin to an index. The conventional ARMS usually have higher annual and lifetime caps, as well as a larger down payment requirement.

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FHA Upfront MIP Increasing to 2.25%

Due to an increase in foreclosures, FHA finds itself needing to increase the cost of mortgage insurance. The upfront MIP is increasing from 1.75% to 2.25%. FHA allows borrowers to purchase a home with 3.5% down. The borrowers using FHA often don’t have a lot of reserves or ability to put more down. The lack of financial resources coupled with a shaky economy has led to an increase in foreclosures. The insurance premiums are used to cover the mortgage losses. The monthly insurance cost of .55% of the loan will remain the same.

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