Nashville Mortgage News- FHA Loans About to Get More Expensive
With the passing of H.R. 5981 and the resulting Public Law 111-229, FHA was given authority to change the amount charged to borrowers for both the Up Front and the Annual premiums. These changes as outlined in Mortgagee Letter 2010-28, are effective for all case numbers assigned on or after October 4th, 2010.
Here are the 6 things you need to know about these changes:
1. The Up Front premium is now 1.0 % for all standard FHA loan programs (this is compared to the current 2.25% premium; it sounds good on the surface, but the impact isn’t huge because the premium is spread out over 30 years typically)
2. The Annual premium is now .90% for LTVs GREATER than 95% on 30 year FHA loans (this is a huge 64% increase over the current monthly mortgage insurance amount of .55%. This one is a zinger, because if you take an average 30 year fixed FHA loan of $150,000, your monthly mortgage insurance payment now jumps from $68.75/mo to $112.50/mo, a $43.75/mo increase!!!)
3. The Annual premium is now .85% for LTVs EQUAL to or LESS than 95% on 30 year FHA loans (the current amount is .55%, so this is a 70% increase in the monthly premium!)
4. The Annual premium is now .25% for LTVs GREATER than 90% on 15 year FHA loans (surprisingly no change, but most FHA loans are 30 fixed anyway)
5. The Annual premium is now .00% for LTVs EQUAL to or LESS than 90% on 15 year loans (no change)
6. These premiums apply to purchases, regular refinances and streamlines
Please note that this new law also gives FHA the authority to raise the Annual premium at will up to 1.5% for LTVs at or below 95% and 1.55% for LTVs more than 95%. Guess what? If they CAN do it, they surely will. How are we ever going to get out of this current housing mess now that HUD has just significantly raised the borrowing costs of getting an FHA loan, and pave the way for future cost increases? FHA now represents about half of all the new loans originated today, so you better believe this will be a drag on the recovery, to say the least.
My advice: if you are currently looking to buy a home and are in need of FHA financing and a Nashville mortgage, you better find it before the end of September and get your mortgage application approved, because after October 4, your loan payments are going up!
Nashville Home Loans- The Top 10 Credit Myths
By · CommentsNashville Home Loans- The Top 10 Credit Myths
As the economy continues to struggle, far too many consumers get taken avantage of by those claiming to be financial gurus and credit repair specialists. Because of this, I want to arm you with information that will help you protect your finances and your family from such “predators”. This video will do just that- it covers the top 10 credit myths, so you can avoid credit advice which can potentially damage your credit. Enjoy.
Nashville Home Loans- Managing Your Debt Strategically
By · CommentsNashville Home Loans- Managing Your Debt Strategically
It’s pretty obvious that the way you manage your debt has a big impact on your credit socres, but did you know that there are some very common and preventable mistakes that poeple make that can cost their credit scores 100 points?
I want to help you create an overall debt strategy that will lead to your long term financial freedom. This video tip contains one of the best-kept secrets for improving your credit score. Discover what the credit-card-balance-to-credit-limit ratio is and what you should do if you exceed the recommended limits.
Nashville Home Loans- Getting Your Credit Mix in Check
By · CommentsNashville Home Loans- Getting Your Credit Mix in Check
This video provides a great tip which is sure to give you the know-how to develop a high-quality credit profile. There is a misconception when it comes to the credit mix need to generate high credit scores, and since this mix makes up a percentage of your actual credit score, this video tip is particularly valuable. Watch and learn which credit account types are the ideal ones to have and how they can be used as a tool for your financial freedom.
Nashville Home Loans- Credit Disputing Do’s and Dont’s
By · CommentsNashville Home Loans- Credit Disputing Do’s and Dont’s
Have you ever looked through your credit report only to find a credit card with a huge balance, and it didn’t belong to you? How about a car loan with a late payment history, and you’ve never missed a payment? Disputing erroneous items on your credit report is a MUST, especially when the information isn’t yours or is just reported incorrectly.
Were you aware that if you don’t follow proper procedures when disputing, your efforts can actually have the opposite effect, and your credit scores could actually drop? My goal is to make sure that your disputing efforts produce the desired results, which is why I wanted to share this extremely valuable tip with you…Disputing Do’s and Dont’s. Just invest 6 minutes with this video, and you will not only save yourself hours of frustration and unnecessary work, but you’ll learn the 10 tips to help you avoid the common mistakes many consumers make in the credit disputing process.
Nashville Home Loans- Dispute, Negotiate or Wait
By · CommentsNashville Home Loans- Dispute, Negotiate or Wait
Cleaning up your credit is no easy task, but it is crucial for your financial health. Dispute, negotiate or wait: these are the action steps you can take when cleaning up your credit profile. While it might seem like an impossible task especially when credit repair is not your full-time job, let me help you simplify things with a valuable video tip. Watch to learn where to begin, whether you decide to open a dispute, negotiate or wait.
Hear some basics on the commitment needed to start the dispute process, some educational resources to help you with the ins and outs of negotiating your credit, and why waiting or d0ing nothing could seriously cost you in the long run. This is the 4th video in the Credit series…
Nashville Home Loans- Creating Your Credit “Take-Action Plan”
This video is 3rd in the series…Hopefully by now, you have a copy of your credit report and you are ready to take action. I remember seeing my first credit report; I really had no clue where to start! Since I know just how frustrating the layout of a report can be, I wanted to share with you some tips on how the 3 credit bureaus (Equifax, Experian, and TransUnion) show your information on their report.
At first, the layout of the credit report might seem like “Greek”, but by the end of the video, you should be able to go through each trade account and locate any items that might be pulling your scores down. In fewer than 10 minutes, you’ll learn how to create your very own action plan, so that you can be headed towards a better credit situation…
Nashville Home Loans- Getting Complete Picture of Your Credit Situation
We’ve all seen the many ads, commercials and mailers that say “Call for your free credit report today.” But how can we know which ones are legit? As a consumer myself, I get overwhelmed with all the ads, which is why I want to give you a quick tip on the 3 reputable ways to get a copy of your own credit report.
Watch the below video to find out why pulling your own credit is ESSENTIAL and what key items to be aware of when ordering your report. Never worry again about what might be on your report by getting a complete picture of your credit situation. It’s up to YOU to take action so you can have financial freedom!
Nashville Home Loans- Your Credit and Setting Your Score Goal
This video is first in a series which covers on of the most important aspects of getting a mortgage loan- your credit. Our economic situation in the U.S. has created a tough credit environment, and credit has become of utmost importance for all consumers. It’s why I’m so committed to helping clients take control of their financial future, so that they can not only qualify for the best interest rate on Nashville home loans, but that they are in a great position when financing a vehicle, shopping for insurance, applying for a new job, etc.
So you can take control of your financial health and future, I’m providing this quick video which will help you 1) set a realistic credit score goal, 2) understand how long it might take to reach that score goal, 3) know what a good score looks like, and 4) learn how having a good score can ultimately save you thoussands of dollars. Enjoy….
USDA Loans – Encouraging Developments
By · CommentsUSDA Loans- Encouraging Developments
Last Friday morning, 4/23/10, a new bill named HR 5017 passed through the House Financial Services Commitee. This bill essentially replenishes the supply of funds to the USDA Rural Develpment loan program and even better, it makes it self-sustaining and not reliant on taxpayer dollars for continuation. Next the bill will next go to a vote in the House. The program had been essentially estimated to run completely out of funds by April 30, so the timing could not have been better.
The USDA program will likely carry some changes such as an potential increase in its Guarantee Fee from its current level of 2%, to 4% (Guarantee fees are financed into the loan amount, so the cost is spread out over 30 years). USDA loans may also start including a monthly mortgage insurance payment, so they will begin to be more in line with the FHA loan program. It would only makes sense, given that FHA has recently increased their upfront funding fee from 1.75% to 2.25% at the beginning of April. Regardless, the USDA loan will still be one of the best ways to purchase a rural eligible home with no down payment. For more information on USDA loans, please check out these articles.
THDA Loans- The Great Advantage Program
By · CommentsTHDA Loans- Great Advantage Program
Of the 3 different THDA loans (TN Housing Development Agency) available, the Great Advantage program falls right in the middle, in terms of the financial assistance offered and interest rate. This program is ideal for the first time buyer who might already have some or most of their down payment and closing costs in the bank, but who still need a little help. THDA loans are typically based on an FHA loan, so a borrower would need a 3.5% down payment. Whereas the Great Start (GS) program offers a 4% grant to qualified buyers for down payement or closing costs, the Great Advantage (GA) program offers a 2% grant. While the assistance is less, the interest rate is over .25% lower than than the Great Start Program. Currently the GA program rate is only 5.05% which is right in line with market FHA rates. This is particularly impressive when you consider you’d get a $3000 grant for a $150,000 loan amount.
Like the GS program, qualified borrowers would need to complete an 8 hour homebuyer education class prior to closing. For more information about THDA Loans, see my other articles on the subject.
How to Remove PMI From Your Nashville Mortgage Loan
By · CommentsHow to Remove PMI From Your Nashville Mortgage Loan
The word PMI conjures up a lot of emotion, usually not the good kind. PMI, or Private Mortgage Insurance, is required on conventional loans when the borrower doesn’t have at least a 20% down payment. (FHA loans have it too, but the most common FHA loan, the 30 year fixed, has it regardless of down payment). Since it could add as much as $300/mo to the payment, my Nashville mortgage clients are very interested in knowing just how to get rid of this insurance as soon as possible.
But most people assume that as soon as they have a 20% equity position in their home, they can simply have it removed from the loan. They assume this because this is what they have been told by many Nashville mortgage originators, realtors, and even title agents, all who are generally very well informed. It’s compounded by the fact that the mortgage servicers themselves have not done a good job of notifying their customers when it can be removed.
So what’s the real scoop? It really depends on whether you’re basing the percentages on the increase in the value of your property (vs. the balance), whether it’s based strictly on your pay-down of the principal balance to below the 80% threshold, or if neither of these, the original amortization schedule itself.
Increase in the Value of Property: the Homeowner’s Protection Act of 1998 (HPA) does not require the lender to consider the current property value, so a borrower will have to check with the mortgage servicer to see if they would be willing to do so. Most lenders won’t consider dropping PMI when a new appraisal is used if the borrower hasn’t had the loan for at least 2 years, because Fannie Mae (FNMA) policy requires at least 2 years from the date of closing in order to drop the PMI. After having the loan for 5 years, FNMA allows for dropping it at 80% using a new appraisal. Between 2 and 5 years, they want you to have the loan-to-value ratio below 75%.
Borrower Accelerated Pay-down of Principal (Cancellation): the HPA does cover these circumstances. If the borrower has paid the principal balance down to 80% or below of the lesser of the purchase price of the home or original appraised value, they can contact the servicer and request that the PMI be cancelled. They must submit the request in writing, have had a good payment history, and satisfy any lender requirements such as asserting that they have no 2nd mortgage on the property, and that the property value has not gone down. If the require the latter, it might mean they’ll want a new appraisal, which could cost up to $400 or so. You’ll definitely want to contact them to find out what their exact procedures are for your getting rid of PMI on your Nashville mortgage loan.
Automatic PMI Termination: the HPA also covers this scenario. When the mortgage principal balance, according to its initial amortization schedule, and regardless of the current outstanding balance on that date, reaches 78% of the original value of the home (lesser of the purchase price or original appraisal), the PMI can be cancelled. For example, on a $200,000 sales price and a 10% down payment, it would take about 8 years for the PMI to be terminated by this schedule. Most lenders will follow this schedule, but some won’t, so you have to be diligent. If your PMI remains in your payment after this, you must call the servicer and request to have it removed from your mortgage, per HPA.
Final PMI Termination (worst case): Under HPA, if PMI hasn’t been canceled or otherwise terminated, it must be removed within 30 days of the loan balance reaching the midpoint of the amortization schedule. E.g., on a 30 year loan, the midpoint would be a 15 years, or 180 months. The borrower must be current on the mortgage.
If your situation falls into the bottom 3 scenarios above, and the servicer you are dealing with tells you something different, you can dispute their claim by referencing HPA. If that doesn’t work, you can always take it to the entity regulating the servicer in question, which is typically the Office of the Comptroller of Currency (OCC), http://www.occ.treas.gov/customer.htm. Being proactive could save thousands of dollars on your Nashville mortgage!
Nashville TN Real Estate- Pleasant Valley Charmer
By · CommentsNashville TN Real Estate- Pleasant Valley Charmer
This lovely mid-century home located at 3450 Crestridge Dr in Nashville, 37204 might be perfect for someone looking for recording studio space or and in-law or teen suite. It even boasts almost a full acre of land, with an inspirational and picturesque landscape including a creek, bridge, and picnic area. It’s in a great location, just off the beaten path at Woodmont Blvd near Franklin Rd.
Upstairs (ground floor) you’ll find plenty of hardwood floors, and fresh neutral paint. The galley kitchen has new granite counters, tile flooring, and updated fixtures and hardware. Downstairs offers many possibilites with a full kitchen, a large living area, and an adjoining bedroom. When you want to relax or entertain, you’ll love the enormous 462 SF deck overlooking the private backyard.
Catherine Hawkins of Realty Executives in Brentwood would be more than happy to answer any questions about this home, and perhaps take you on a personal tour if desired. She can be reached at (615) 294-3500 or at hawkins@realtracs.com and will be happy to serve your Nashville TN real estate needs- give her a call today.
THDA Loans- The Great Start Program
By · CommentsTHDA Loans- Great Start Program
The THDA loan program which offers the most financial assistance to first-time buyers in TN is the Great Start Mortgage Program. Just like the Great Advantage and Great Rate Programs, it is usually an FHA loan, but it can also be a VA or USDA loan (which are both 100% programs).
Here is how it works: a borrower meets both the guidelines of FHA and the eligibility requirements of THDA loans, but needs help for closing costs or down payment. Since FHA loans require a 3.5% down payment, this loan works great because it essentially offers the highest possible assistance (4% grant money) to the borrower. This grant can cover the down payment, the closings costs, or both, and is calculated by taking 4% of the FHA loan amount. When combined with the allowed 6% max seller financing concessions, it would allow the borrower to potentially have a no-down payment loan, along with all closing costs and prepaid items covered. (Note: FHA will most likely lower the max seller concession to 3% in early summer 2010)
The interest rate for the Great Start loan is currently 5.35%, based on a 30 fixed loan. As a matter of fact, all THDA loans are 30 fixed terms, and the rate for this program is just modestly above the market FHA rate, which is excellent when you consider the grant. Rates on these loans don’t change as often as regular FHA loans, as the rates are determined by the TN Housing Development Agency and their bond issuance. In other words, the THDA loan rate is the same regardless of which lender you choose.
With the demise of 80/20 combination loans, 100% subprime loans, and the seller-funded down payment assistance programs like Ameridream, the THDA Great Start program is currently only 1 of 3 loan programs, including the USDA Rural and VA program, which offers a buyer the ability to have no money down as well as partially or fully covered closing costs (with seller help). A few more very important points: the home must be a primary residence, the borrower(s) must be first-time buyers (not owned a home in the last 3 years) or must be purchasing a home in a targeted county, must take a Homebuyer Education class before closing, and may be subject to Federal recapture tax (doesn’t affect most buyers). Please see my other articles for more general information on the awesome THDA loan program.
Nashville TN Real Estate for Sale
Located at 5620 Cedar Rock Drive in Nashville, TN, this Brentwood Cove home just returned to the market! This lovely all-brick 1.5 story home has a wonderful open floor plan perfect for entertaining. You’ll be impressed with the beautiful hardwood flooring and all the extras this home offers: lots of windows bringing in the sunlight, vaulted ceilings, stainless appliances and corian counters, a huge bonus room over the garage, a beauful master bath, and a wonderful deck overlooking the treed and fenced backyard.
Click on the picture above, and you’ll be able to find out a whole lot more about this home, from property maps, points of interest, nearby schools, and even more pictures. The home is proudly listed by Catherine Hawkins with Realty Executives in Brentwood. She’d be glad to answer any questions you might have about this lovely property or any Nashville TN real estate you might have some interest in. She can be reached at (615) 294-3500 or at hawkins@realtracs.com.
