FHA loans

FHA Loans Getting More Expensive-MIP Will Last Longer Than Previously Insured Loans

The 3.5% down payment on FHA loans could be more expensive for buyers than expected. Beginning April 1, 2013, the mortgage insurance premium will go up by .1% to 1.35% which may not even be noticeable to most would-be homeowners. The staggering increase will occur on 6/3/2013 when FHA’s policy on the duration of the required mortgage insurance will be increased for the life of the mortgage

There are buyers that qualify on income and credit who may not have the necessary additional down payment required for 80% and 90% conventional loans. The 3.5% FHA program has provided a great vehicle to get into a home with a minimum amount of cash.

Homeowners who expect to be in their home long term can refinance with a conventional loan without mortgage insurance once the equity has increased due to amortization and appreciation. For buyers to avoid these increases, they will need to act now to get the FHA commitment issued prior to these change dates.

Sincerely,

Isn’t it nice to know that you have a friend in the business that you feel comfortable introducing to your friends, family members, and neighbors who could use my help.

RE/MAX Results

John Mazzara

7300 France Ave S #410

Edina, MN 55435

Off-952-929-2577

Cell-612-386-7027

Fax-952-928-3799

Google Voice- 952-491-0884

john@johnmazzara.com

http://www.MinneapolisStPaulHomes.com

Watch my Youtube video on how I sell a home:

http://www.youtube.com/watch?v=oz1zGDOXcoQ

RE/MAX real estate intro video at http://youtu.be/EJE_s67xIWI

NMLS # 332556

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FHA loans

FHA Fees Going Up April 1st-HURRY Don’t Wait!

FHA has raised the annual Mortgage Insurance Premium to 1.25% beginning April 1st. MIP is required on all FHA loans and used to fund losses by lenders for borrowers who default on their mortgages. As of June 1st, FHA loans in excess of the standard maximum of $625,500, in high-cost areas, will have a premium of 1.5% of the loan amount.

In addition to the increase in the annual MIP, FHA also announced it plans to raise the fee on the up-front MIP from 1.00% to 1.75%. No date was reported for its implementation.

The bottom line will result in a borrower’s payments going up. However, it might not be restricted to the MIP. Freddie Mac’sPrimary Mortgage Market Survey showed that both 30 year and 15 year mortgages have gone up too.

One way to avoid the increase is to have a completed sales contract and have your lender order the FHA commitment prior to April 1, 2012. If you plan on buying a home this spring, there is a reason to do it earlier rather than later.

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FHA loans

Renter Resources For Emergency Services That Might Help With Rent

In today’s economic environment, tenants are feeling the pain of a recession as well-or even more-than the rest of the population. This might mean their job loss or lesser wages. It is hard to pay the rent without an income. Therefore, as a landlord, your consider learning about and sharing resources with your tenants that provide emergency services in the Twin Cities. I have put together a few ideas on services/programs that might be able to help with food, utilities and even the rent. Besides the greater possibility and likelihood of getting your rent, you are being a friend and showing that you care. What goes around comes around.

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2012-will it be just another year or is it YOUR year of transition?

I recently gave a Toastmasters speech on this topic. Key to answering the question is whether or not you have written goals in mind regarding what you want or intend to accomplish. Unless there are specific goals that require you to plan and live with a purpose and focus, life will just happen. Either way is fine as long as you know what to expect. Many people are frustrated when they expect something different. Mastering time and focusing on goals may more create a more fulfilling life. Soon, I will begin my annual project of goal setting. I intend to plan my year with measurable goals. I find I’m much happier when I’m focused on where I’m going. As such, I just came across this PDF called The Tower. I thought it was interesting and wanted to share it here. It is a short e-book about a man who is achieving his goals and living the dream. He’s living life on his terms and creating a legacy. He became more focused after he analyzed a video game he was playing. It is a pretty interesting book. Maybe one of your goals involves real estate-buying a new home or investment property. If this is a goal of yours, I can help. Give me a call and let me help you figure out how we can make real estate goals become your reality in 2012.

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Short Sales Vs Foreclosures Vs Traditional sales

We need to understand that while the current economy is really a “Tale Of Two Cities” in that some people have no idea we are in a recession whereas others are in deep pain, the real estate market as a whole is being impacted by distressed properties. Based on the current backlog of homes, it may be this way for some time. That being said, why are short sales being embraced by everyone as the most economical way to move markets forward? When you look at a comparison of the loss incurred by the lender, you will see that losses are generally worse with a foreclosure. Larger losses via lower sales prices ultimately impacts everyone who is buying, selling or refinancing. I have a report and flyer I’d like to share. Both provide you with opinions and resources so you can draw your own conclusions. Solving the housing problem starts with understanding the problem as well as exploring viable solutions.

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FHA loans

HUD Home Tips

Recently, a representative from Best Assets came to speak in Minnesota about how they are handling the disposition of HUD homes in conjunction with the asset managers, agents, and the website http://www.HUDHomeStore.com . The process of buying and selling a HUD home is very similar to that of “traditional transactions”, but there are some small differences and nuances. I have attached a sheet that covers some of items that you should be aware of.

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Minnesota HUD Homes

Most properties that become lender owned are generally available through our online MLS. HUD homes are listed in our online MLS as well. That being said, HUD maintains a site at http://www.HUDhomeStore.com that lists all their properties for all states and provides you a lot more information about specific homes. I would encourage you to go there and see what is available. As an agent, I am able to show and help you purchase a HUD home. Just let me know what you’d like to view. I can set up a specific search for you within our Online MLS and see that listings that meet your parameters are emailed to you daily. Attached you will see that process that occurs once you’ve purchased a HUD home. It will provide you with a flow chart so you know what happens. Did you know that HUD allows you to put $100 down on a full price purchase offer of a HUD home utilizing FHA financing? These terms and conditions are subject to change at any time. Keep up to date at http://www.HUDhomestore.com

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Expanded HARP Mortgage Refinance Option-Available Soon!

Today, the government expanded the HARP program and qualifications. Attached is the news release. Qualifying for a new loan to lower your rate may now be a possibility even if you are upside down-ie underwater on your loan. Terms/conditions always apply-see the release and call me if you think you fit the parameters. We can take it from there.

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National & Minnesota Foreclosure Trends

The market is still slow, but this is the opportunity for those who want to roll back the clock and purchase at price levels combined with interest rates that we haven’t seen in years. See the newsletter for more information. Also, I have MUCH more information to share. Simply give me a call or send me an email to get started. Let me show you how I can help.

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FHA loans

VA-Veteran Loans Funding Fee & FHA Maximum Mortgage Changes

Starting October 1st, 2011, the maximum FHA loan limit for single family loans is being lowered from $365K in the Twin Cities to $318,550. See the attached form. This is not a good thing, but reflects the reality of declining value of much of the real estate. Unfortunately, underwriting of all loans continues to tighten. On a positive note, the VA funding fee is being lowered. This would be due to less losses and a lesser need to collect as much insurance premium to protect against defaults. So, the question I have pondered is: Why are VA loans-typically financed at 100% loan to value-not experiencing the same loss ratios as other mortgage programs. VA 100% financing has been around forever. It works-and well. The problem of our mortgage crisis is not the loan to value or a required minimum down payment or tighter underwriting as some would have you believe. Imagine all the new homeowners if we actually took what we’ve learned from decades of underwriting VA loans and applied it to a new “stimulus mortgage program”. Instead, we are becoming a nation of renters. Somebody in congress needs to talk to the people who have their boots on the street for real solutions to our mortgage and real estate problems.

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Using A Reverse Mortgage To Purchase

With some of the major lenders leaving the reverse mortgage business-possibly just on a temporary basis-you might find it more difficult to find a lender offering the program. At the same time, it is worth your time to look. If you are 62 years old and have approximately 50% equity in a home, you can obtain a reverse mortgage. You can use this loan for a purchase as well. So, if you put down 50% of the value of the home, you can obtain a reverse mortgage. Remember, the reverse mortgage doesn’t have a monthly payment associated with it. While you are still responsible for the taxes and insurance, you pay off your loan when you sell the home. The attached PDF will give you some examples of how much is required to buy a home using a reverse mortgage at various age groups. This is a unique opportunity for seniors to consider, especially if they are on a fixed income.

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FHA loans

An Economic Blog/Resource For You

I just found this blog at http://www.CalculatedRiskBlog.com It is a cool economic blog. Go there and read articles to see what is happening in the world. Then, go to the graphs gallery. Simply amazing. It is worth your time if you want a macro view of the world and environment in which we live today.

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FHA loans

What’s happening in the Twin Cities Real Estate market?

Are you wondering what’s happening out there? Well I have my “boots on the street”. Here is where I see it and where I see it going in the short term. Overall, sales are slow, but not dead. We are now in the fall market. In as early as 30 days, we could have snow on the ground. Then, you have Thanksgiving and all of the other holidays. Combine all these events and this tends to be the slowest time of the year. This means it will likely get slower over the next 90 days for traditional home sales. I’ll keep you posted about the Spring market when we get there. That being said, I am keeping very busy-thankfully!. Many of my transactions today are involving investors. The deals are just too good to pass up. I would be happy to show you what I mean and give you actual examples involving investor transactions I’ve been involved with. If you believe that values will increase in the future, now represents the best buying opportunity I have seen in my 26 years. Is it all uphill from here? Absolutely not! In fact, depending on the community and property type, it might get worse before it gets better. Yet, if you are a long term investor, purchasing for the long term, this is a golden opportunity. Interest rates are at 50 year lows, the banks will soon have to do something with their inventory of properties. Banks are actually accelerating their foreclosure procedures. This means more homes will be available for sale or even possibly for rent. The government is thinking about solutions-so we’ll have to stay tuned. Will they become landlords? Will they raise the LTV loan limits for underwater mortgage refinance opportunities and expand eligibility beyond Fannie and Freddie loans? Will there be write downs of principal and equity sharing going forward for existing underwater homeowners? These are all ideas being talked about. Stay tuned for more!!

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Amazing Video-Wouldn’t Believe It If I hadn’t Viewed The Video

Amazing message-mortal enemies can get along! What an example for the rest of us!

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Great Cartoon from 1948

Human beings are human beings. Only the names change. When we refuse to understand history, psychology, and human nature we end up repeating mistakes that could be avoided. Re-learning lessons is getting mighty expensive. Definitely worth watching.

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VA financing their foreclosed properties for Investors

This is pretty exciting.  It is a way that investors can buy VA foreclosed homes with VA loans.  I personally have not participated in this yet, but I wanted to make sure everyone knew that it was an option and might be available.  See the flyer for more info

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FHA Mortgage Loans are Back and Just in Time

By Aaron Gordon

When I first started in the mortgage business, at least one in four of all of my buyers got an FHA loan. The rates were fantastic, the down payment requirements minimal, and the credit requirements were close to meaningless. Most first – time home buyers got an FHA loan.

In the last three years, over 600 families have trusted me with their home loan needs. Of those 600, I did a total of two FHA loans over that time. One in 300.

I wasn’t alone. FHA guaranteed less than 5,000 loans in California last year. In 2003, they did over 100,000. A 95% decrease in demand. Nationally, FHA loans are down 50% from a few years ago.

FHA loans lost their popularity in the past few years for numerous reasons. Loan limits were too low for the fast-appreciating real estate market, income documentation guidelines were too strict, and appraisal restrictions were very difficult.

Subprime lenders, with looser guidelines, capitalized and met this demand.

Home values increased more than FHA lending limits did. The average home in Las Vegas was around $300,000. The FHA loan limit was around $270,000. Subprime lenders would go over $1 million.

FHA requires full documentation of your income and a 3% down payment. Subprime lenders were doing 100% loans with stated income with scores as low as 600.

Although sometimes flexible, FHA guidelines limit your debt-to-income ratio to 41%. Many subprime banks were letting borrowers go to 55%.

With rising sale prices, more borrowers went with stated income loans. FHA wouldn’t allow this. Subprime did.

The FHA appraisal requirements were much more strict and this also turned off many sellers. Subprime lenders had no additional requirements.

The FHA loan was, quite frankly, a last resort. Subprime had taken its place.

Today, that has changed. With all of the recent guideline changes, the subprime loan is nearly dead with anything less than 5-20% down. Many subprime banks have gone out of business. Many more will.

FHA is back!! Once again, borrowers are looking at this as a primary option, especially first time homebuyers.

There are two types of mortgage loans; government loans like FHA and VA, and then there are the rest, which are called conventional loans.

100% financing on conventional loans is not as readily available as it was, particularly for those with marginal credit. FHA has not changed. 97% financing was and is available regardless of credit score. In the last three months, I have closed five FHA loans.

FHA recognized their business was getting hurt by increasing home values so they dramatically increased their loan limits.

In Las Vegas today, the FHA loan limit is $304,000. This is right in line with our average sales price. The timing could not be better and, as a result, FHA loans are back as a very viable loan option.

If you have very little or no money available for a down payment, bad-to-fair credit and feel like you have way too many bills, FHA may be your key to homeownership today.

FHA does not loan money, they insure loans. You don’t go to the FHA to get a loan. You go to a mortgage company that has been approved with the FHA. These companies have special permission to underwrite and close the loan.

You can buy a single family home, a duplex, triplex, or 4-plex. FHA will even insure loans on manufactured/mobile homes.

As an approved FHA lender, when we do an FHA loan, it is insured by FHA. If the loan goes into default, they guarantee it. This means the loan has very little risk to the lender. As a result, the rates are nearly equal to that of a conventional loan, even though the credit scores may be way worse.

Rates on conventional loans are usually based on credit score. The better your score, the better your rate. This is not so with FHA. Everyone, regardless of score, gets a great rate.

FHA was started in the 1930′s to assist first-time homebuyers. The goal was to help families with lower and moderate income get home financing. The program was geared for minorities as well.

Many lenders in today’s subprime mess are pointing the fingers at each other. They believe that countless numbers of the homes going into default today are because of high subprime rates. They believe these homes would not be in jeopardy with an FHA loan with a much lower rate.

For example, last week I closed a borrower on an FHA loan. His credit score is 611 with limited trade lines and 3% down. His interest rate is 6.250% on a 30 year fixed, which he will never have to refinance if he doesn’t want to.

Last year, because of the loan amount, this loan would have probably gone subprime with an interest rate of closer to 8.000% on a 2 year fixed rate, that would have likely forced a refinance in 24 months.

And he doesn’t have a prepayment penalty!! FHA doesn’t have prepayment penalties. As you know, most subprime loans have prepayment penalties and if you want it waived plan on the rate going up by 1-2%.

The program works and provides incredible options for borrowers whose only choices in the last few years have mostly been awful.

There are many advantages to an FHA loan.

You are only required to put down a 3% down payment and the lender can help you get it. It can also be gifted from a close friend, a relative or a non-profit organization that provides financial assistance.

There are many private down payment assistance companies (DAPs) that can help you with the 3% down payment. The FHA allows this and works with these companies. You have likely heard of a Nehemiah. Nehemiah is a DAP. If you do a conventional loan, this is not allowed.

You can have less than perfect credit. In fact, your credit can be pretty bad. FHA is far less concerned about your credit score than they are your history over the last two years in paying your bills on time. They will often ignore previous financial troubles and other blemishes on your credit report.

There are no “set” guidelines about credit. There is much more flexibility at the underwriting level.

For example, I recently had an FHA loan where the borrower was putting down his own 3% and not using a DAP, he was employed for over two years, and he has no late payments for the past two years. He also had four months reserves. His credit score was under 550, his debt to income ratio was 47%, and he only had one current trade line. The loan was approved. The FHA rate at the time was 6.125%.

As opposed to most conventional lenders, which have strict guidelines, FHA underwriters have some discretion to look at the overall strength of the file and make a decision. For example, even though it is commonly thought your debt to income ratio must be 41% or less to qualify; I have seen FHA loans approved with debt to income ratios over 50%.

Some of the FHA guidelines are more strict. You do have to be two years out of bankruptcy from the date of discharge and you must have some good re-established credit to get an FHA loan.

If you had a foreclosure you likely need to wait at least three years for an FHA loan and your credit should be pretty clean after that date.

If you can prove the foreclosure occurred because of extenuating circumstances like the death of a spouse or a serious illness that prevented you from working, they will sometimes make an exception to this as well.

The FHA has many different choices of loan programs like 30-year fixed, 15-year fixed, 1, 3, 5, 7, and 10 year ARM’s too. Interest only is not available.

The rates are excellent as I discussed above. The fees are controlled by FHA so you usually pay less for the mortgage too.

In today’s market, there is a lot of bank-owned on the properties that are in need of pretty substantial repair. The FHA has a program that allows owner-occupied borrowers to finance up to $35,000 in the mortgage to make these repairs.

In a conventional loan, these repairs need to be made before the close of escrow. In many cases, the seller doesn’t want to make these repairs and offers the property “as is.” The buyer can’t afford to make the repairs and certainly doesn’t want to make them before they own the house. This usually kills the deal after the home inspection or appraisal.

The FHA has a plan for this. The program is called a 203(K) and it allows for the appraiser to consider the value of the home after all of the repairs and renovation is made. You get to buy the home, fix it up to be livable, and then you get to include all these costs in one easy loan. And you still only have to put 3% down. No other loan program allows for this.

When the loan is closed, the repair/renovation money is withheld in escrow, as well as additional reserve funds of 10-20%, to pay for these improvements and any overages that may occur that weren’t factored at the time.

The contractors go in, fix the house, and then they get paid through the withhold account and reserves. The biggest catch here is, once again, the home has to be owner-occupied. This program is not available for investors or second home buyers.

In today’s market, the only negatives to an FHA are loan are loan limits, which are $304,000 and that unless you put down 20%, which most people don’t, your FHA loan will require mortgage insurance.

Mortgage insurance (MI) is handled a little differently than you are used to with a conventional loan. For one, it’s usually a bit cheaper. FHA mortgage insurance is not based on credit score like conventional loan MI is. It runs 0.5% of the loan amount and is broken down over your monthly payments.

FHA also has an upfront insurance premium that is 1.5% of the loan amount. That premium is due at the close of escrow and can either be paid in full at close or added to the loan amount. As most FHA borrowers have very little money to put down, this premium is usually financed into the loan.

The good news here is that mortgage insurance, as of January 1, 2007, was made tax-deductible, so that helps as well.

And how about this? FHA loans are assumable!! If you want to sell your home, you can simply transfer it over to your buyer and he doesn’t have to go out and get a new loan. The buyer does have to meet the FHA credit standards, but as I have already touched on, those are very reasonable.

The bottom line is if you are a first-time homebuyer or you are a bit more credit-challenged and your lender suggests a subprime loan you should ask for FHA as an option.

In addition, if you are being quoted more than the “going rate” for a loan, you believe you can support your income with paycheck stubs and W-2′s, and the loan amount is $304,000 or under in Las Vegas, you will also want to ask about an FHA option.

If your preferred lender says FHA is not for you for any other reason other than loan amount or income documentation, and suggests a subprime loan, you may want to get information from a different lender. Not all lenders are permitted to do FHA loans. You want to make sure the reason why you are being steered away is not simply because they can’t do the loan.

Aaron Gordon is a top-producing Senior Mortgage Consultant with Maverick Residential Mortgage in Las Vegas, NV. His monthly newsletter currently goes out to over 10,000 real estate agents and other professionals in the Las Vegas area. He helps over 200 families each year who trust him in their mortgage needs in many states. He can be reached by email at aarongordon@maverickmortgage.com or you can see more newsletters at aarongordon.net

Article Source: http://EzineArticles.com/?expert=Aaron_Gordon
http://EzineArticles.com/?FHA-Mortgage-Loans-are-Back-and-Just-in-Time&id=578900

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Make The Right Home Improvements & Increase Your MN Home Value

Are you ready to sell your Minnesota home for the highest dollar with the least amount of hassle? I have helped hundreds of MN homeowners get their home sold. Can I help you?

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Minnesota Home Seller Secrets

Are you ready to sell your Minnesota home for the highest dollar with the least amount of hassle? I have helped hundreds of MN homeowners get their home sold. Can I help you?

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Minnesota Home Buyer Secrets

First, read the guide and learn how to purchase a Minnesota home successfully. Then, call me to set up an appointment to begin the process.

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