Archive for FHA Loans
Nashville Mortgage News- FHA Loans About to Get More Expensive
Posted by: | CommentsNashville 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 Mortgage News- LOW to NO Down Options- FHA Loans
Posted by: | CommentsNashville Mortgage News- LOW to NO Down Options- FHA Loans
FHA loans are the most popular program for first time buyer, but fortunately you don’t have to be a first-timer to qualify. Unlike loan programs like USDA Rural Development loans, there are no geographical limitations, so you can buy anywhere with FHA. But, FHA is not a 100% financing loan program. You’ll need the required 3.5% down coming from one of the following sources: your own money, gift funds from a close family member, a gift/grant from a qualifying non-profit or government entity, or even a second mortgage set up by a non-profit agency. For a Nashville mortgage or middle-TN mortgage, The Housing Fund, Inc. (THF) is a non-profit organization which has a program that can help low to moderate income earners with down payment/closing cost assistance by providing a second mortgage up to $7000 (amount of loan is dependent on income). Homebuyer education is required, and you have to contribute out of your own funds at least 1% of the sales price towards closing costs or down payment. In essence, you could potentially purchase a $125,000 home with as little as $1250 out of pocket, utilizing both FHA and a THF second mortgage. FHA first mortgage loans have rates that generally rival the best conventional rates, particulary the 3o fixed loans. Virtually all FHA lenders require a 620 credit score now.
The next installment of Nashville Mortgage News will discuss the THDA program…stay tuned!
