All posts in FHA Loans

Is A No Closing Cost Mortgage The Way To Go?

by Justin Miller on May 16, 2012 in Conventional Loans, FHA Loans, Jumbo Mortgages, Mortgage Education 101 with No comments

 

 

 

 

 

 

 

The answer is that it depends on the individual buying and their goals.  With a refinance right now it can be a great option because if rates are to drop further you can refinance again.  If you plan on holding onto the mortgage for a long period of time then it might make more sense to pay the closing costs.  Keep in mind that nothing is free in life and the catch here it that the interest rate will be higher than if you pay the closing costs on your own.

This is where a Mortgage Professional comes into play and you need to make sure you are being given all of the options available so you as the borrower can determine what is best for you and never have any regrets.

The Perfect Loan – What’s Needed To Close

by Justin Miller on April 10, 2012 in Conventional Loans, FHA Loans, Mortgage Education 101 with No comments

 

 

 

 

 

 

This is the best article I have ever read from Forbes and anyone looking to get a mortgage MUST read this.

“THE PERFECT LOAN FILE“  – here is one paragraph that can occur a lot throughout the loan process:

It all comes down to your proof. If the lender asks for a specific document, give them exactly what they are asking for, not what “should be OK,” – because it won’t be. This is where the approval process tends to go off the rails, when the lender asks for specific documentation and the borrower supplies something else. Here, too, is where both sides get frustrated. So if the
lender asks for a bank statement and there are 5 pages for that bank statement, send them all 5 pages, and not just the summary. If you send them the summary page and they ask again, don’t complain that the lender keeps asking for the same thing when you never sent it in the first place. This may sound elementary, but the vast majority of mortgage approval process woes stem from scenarios just like this.

 

Important FHA Guideline Changes

by Justin Miller on March 8, 2012 in FHA Loans with No comments

LoanToolBox.com summarizes this so well that I felt that it was best to just copy and paste it:

FHA recently announced several changes that will impact underwriting in several areas. These changes are effective April 1, 2012.

For self-employed borrowers: P&L statements are now required if the last business tax return is more than 3 months old; statements must be audited if P&L income is greater than the two year average.

For loans with disputed accounts that receive an “Accept” by TOTAL: These are not required to be referred to a DE underwriter for review as long as the total amount of combined balances (1) does not exceed $1,000 and (2) the dates of last activity are older than 2 years. If singular or combined balances total more than $1,000 they must be paid in full at or prior to closing, or provide proof of payment arrangements with 3 months of payments verified.

For collection accounts: If the total balances of all collection accounts are less than $1,000, the borrower is not required to pay them off as a condition of approval. If singular or combined balances total more than $1,000 they must be paid in full at or prior to closing, or provide proof of payment arrangements with 3 months of payments verified. Judgments must be paid unless payment arrangements have been made and 3 months of payments are verified.

For definitions: The following are now included in the definition of family member for the purposes of Identity of Interest transactions: Brother, Stepbrother, Sister, Stepsister, Uncle, and Aunt.

If you have any questions about these updates, and what they might mean, give me a call or send me an email and I’ll be happy to discuss this or any other pertinent matters with you.

Eligible & Ineligible Repairs for the Streamline 203(k) Rehab Mortgage

by Justin Miller on February 27, 2012 in FHA Loans with No comments

 

 

 

 

 

 

 

Eligible Repairs:

  • Repair or replacement of roofs, gutters, and downspouts
  • Upgrading of your existing HVAC systems
  • Upgrading of your plumbing and electrical systems
  • Repair of Flooring
  • Repair of exterior desks, patios and porches
  • Minor remodeling (no structural repairs)
  • Painting – interior/exterior
  • Weatherization including storm windows/doors, insulation, weather stripping, etc.
  • Purchase & installation of new appliances
  • Lead based paint stabilization or abatement of lead-based paint hazards

Ineligible Repairs:

  • Major rehabilitation
  • New construction including room additions
  • Repair of structural damage
  • Repairs requiring detailed drawings
  • Landscaping or site amenity improvements
  • Any improvement that will take longer than 6 months
  • Rehab activities that include rehab that requires more than 2 payments, architectural plans or exhibits or a plan reviewer, results in work not starting within 30 days of the loan closing or cause the buyer (mortgagor) to be displaced from the property for more than 30 days during the rehab period.  FHA anticipates that the property will be occupied during rehab and finished in 6 months or less.

What Is the FHA 203(k) Streamline Rehab Program?

by Justin Miller on February 27, 2012 in FHA Loans with No comments

 

 

 

 

 

 

 

This is a great loan especially for anyone buying in Fort Lauderdale & South Florida because so many foreclosures and short sales are not in great shape.

The FHA 203(k) Rehab Mortgage enables the borrower to finance both the purchase or refinance of a home and the cost of the rehabilitation through a single mortgage.  The standard FHA guidelines apply so you only need to put down 3.5%.  It allows for up to $35,000 in improvements and is intended to facilitate uncomplicated rehabilitation and/or improvements to a home for which plans, consultants, engineers and/or architects are not required.

FHA To Announce Premium Increases

by Justin Miller on February 22, 2012 in FHA Loans with No comments

Here is another reason to buy now!  Last week, President Obama released his budget for fiscal year 2013. As part of the overall budget, and as the commentary reminded folks of yesterday, HUD stated that it will be implementing a 10 basis point increase to annual premiums for single family loans, and a further 25bp increase for loans over $625,500. So even though the FHFA has already implemented this for Freddie & Fannie, it is only a matter of time until the change hits government production.

Conventional, FHA, USDA…Oh MI!

by Justin Miller on February 16, 2012 in Conventional Loans, FHA Loans with No comments

Conventional, FHA, USDA…Oh MI!.

What You Need To Know About The FHA 203(k) Rehab Loan

by Justin Miller on February 15, 2012 in FHA Loans with No comments

This is a great loan especially for those buying in Fort Lauderdale and South Florida since so many homes are foreclosures and short sales that are in need of work.  The work is needed to be done in order to get financing and also for improvements the buyer wants to make.

So who can qualify for this and how does it work?  It has to be your primary residence,  you can’t have any other FHA mortgages, have the credit, income, and assets, and be within the counties loan limits.

It is an FHA mortgage which requires 3.5% that allows for repairs and improvements to be made to the property.  It is best to try to keep the total costs at $35,000 or less because you qualify for the 203K Streamline Rehab which is an easier process.  If you go over that amount it’s not a big deal.

Here is a description from HUD’s (FHA) website on how it is different – “Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made……..

There is a lot to know on this product so make sure to consult a Mortgage Professional like myself that is an expert on it.  You can also visit HUD’s website online to read up on it yourself.

FHA Mortgage: 30 Year Versus A 15 Year Fixed

by Justin Miller on February 6, 2012 in FHA Loans with No comments

I have mentioned my thoughts on carrying a big, long mortgage for years now and I still stand by that however with an FHA loan it can be a little different due to the costs of the monthly mortgage insurance on a 30 year fixed versus a 15 year fixed.

On a 30 year fixed, if you put less than 5% down the monthly mortgage insurance factor is 1.15% and if you put 5% or more down it’s 1.10%.

On a 15 year fixed, if you put less 10% down the monthly mortgage insurance factor is .5%,  if you 10 – 21.99% down it’s .25%, and if you put 22% or more down there isn’t any.

Here is an example: On a $10ok purchase price, with 3.5% down on a 30 year fixed, the monthly mortgage insurance is $91.67 per month but on a 15 year fixed it’s $39.30 per month.  The interest rate is normally about .5% lower on a 15 year fixed.  If market rate is 3.5% on a 15 year that would make your Principle & Interest payment at $696.76 per month plus the $39.30 per month of MI for a total payment of $736.06 per month.  On a 30 year fixed at 4% the Principle & Interest payment would be $437.66 per month plus the $97.67 per month of MI for a total monthly payment of $529.33.

Both the 30 year and 15 year fixed require the one time Upfront Mortgage Insurance Premium (UFMIP) of 1% of the loan amount.  You have to keep the monthly mortgage insurance on until you have 22% equity AND a minimum of 5 years other than if you have a 15 year fixed putting 22% or more down then you have no monthly mortgage insurance from the start.

Every borrower’s circumstances are different so make sure to consult a Mortgage Consultant and/or Financial Planner.  I use Mortgage Coaching software to help my clients determine the best loan for them.

FHA Extends Waiver of Anti-Flipping Regulations Through 2012

by Justin Miller on December 27, 2011 in FHA Loans with No comments

This is for properties where the seller acquired the property and is trying to resell it within 90 days and is not a bank or bank disposition company.  It is important to note that 2 appraisals are required and everything on the home inspection must be fixed.

Here is FHA’s email announcement:

FHA Extends Waiver of Anti-Flipping Regulations Through 2012:

In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, Acting Federal Housing Administration (FHA) Commissioner Carol J. Galante will extend FHA’s temporary waiver of the anti-flipping regulations. 

With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days.  In 2010, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011.  The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA.  All other terms of the existing Waiver will remain the same.  The Waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers.  The Waiver continues to be limited to sales meeting the following conditions:

  • All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
  • In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value
  • The Waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
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