Tuesday, February 1, 2011
Refinancing Options
If you waited to refinance in 2010, you should revisit your options now. Rates began to increase a bit in October-November and seem to be following that same course to date. If your rate is 6.0% or above, fixed or adjustable, please contact me, and I will do a complete analysis of your situation. You may also want to consider refinancing into a shorter term, i.e. a 15 or 20 year amortization. You may be able to save thousands of dollars in interest and build equity in your home much quicker. Let me work the numbers for you! (513) 520-6044.
Tuesday, September 7, 2010
FHA Changes Loom
FHA is making changes to the structure and pricing of their Mortgage Insurance Premiums. The FHA Reform Bill was signed by President Obama on August 12, 2010 and gave HUD permission to increase annual mortgage insurance premiums. These changes will go into effect October 4, 2010.
These changes will only effect new FHA borrowers. Borrowers in existing FHA loan products do not have to worry about these changes, unless they are looking to refinance after October 4th.
What does this all mean to a potential FHA borrower? Basically, the price of monthly mortgage insurance is going up; thusly, the borrower's total monthly mortgage payment is going to increase. A homebuyer using FHA financing is going to find that their overall borrowing power will be reduced.
With the new guidelines, on a typical FHA purchase loan with the required 3.5% down, the annual mortgage insurance premium will be .90% of the base loan amount(current rate is .55% of total loan amount). If a borrower puts 5% or more down, the annual premium will be reduced to .85%.
Also, if a borrower arranges a 15 year term, and has 10% or less down, the annual premium will be .25%.
FHA will be reducing the required Upfront Mortgage Insurance Premium (UFMIP) from the current 2.25% to 1%.
Here is a sample loan scenario:
$100,000 purchase price, 30 year fixed FHA financing with 3.5% down payment
The borrower would need a $3,500 down payment. The borrower will have to pay a 1% UFMIP of $965, which will be added to the loan amount and amortized over 30 years. The total loan amount would be $97,465.
The annual mortgage insurance premium is .90% of $96,500 which is $72.37 per month.
Using the current calculation of annual mortgage insurance premium (at the .55% rate) the monthly payment in this scenario would have been $45.22. the increase to the borrower in this example is $27.14 per month.
The larger the purchase price and loan amount, the greater the impact these changes will have on a borrower's monthly payment.
Even with the upcoming changes, FHA financing is still a great option for a low down payment purchase. Please contact me, and I will explain the full impact of these changes in detail: (513) 520-6044 or bahale1@gmail.com
These changes will only effect new FHA borrowers. Borrowers in existing FHA loan products do not have to worry about these changes, unless they are looking to refinance after October 4th.
What does this all mean to a potential FHA borrower? Basically, the price of monthly mortgage insurance is going up; thusly, the borrower's total monthly mortgage payment is going to increase. A homebuyer using FHA financing is going to find that their overall borrowing power will be reduced.
With the new guidelines, on a typical FHA purchase loan with the required 3.5% down, the annual mortgage insurance premium will be .90% of the base loan amount(current rate is .55% of total loan amount). If a borrower puts 5% or more down, the annual premium will be reduced to .85%.
Also, if a borrower arranges a 15 year term, and has 10% or less down, the annual premium will be .25%.
FHA will be reducing the required Upfront Mortgage Insurance Premium (UFMIP) from the current 2.25% to 1%.
Here is a sample loan scenario:
$100,000 purchase price, 30 year fixed FHA financing with 3.5% down payment
The borrower would need a $3,500 down payment. The borrower will have to pay a 1% UFMIP of $965, which will be added to the loan amount and amortized over 30 years. The total loan amount would be $97,465.
The annual mortgage insurance premium is .90% of $96,500 which is $72.37 per month.
Using the current calculation of annual mortgage insurance premium (at the .55% rate) the monthly payment in this scenario would have been $45.22. the increase to the borrower in this example is $27.14 per month.
The larger the purchase price and loan amount, the greater the impact these changes will have on a borrower's monthly payment.
Even with the upcoming changes, FHA financing is still a great option for a low down payment purchase. Please contact me, and I will explain the full impact of these changes in detail: (513) 520-6044 or bahale1@gmail.com
Tuesday, July 27, 2010
Where Did Rural Development Home Loans Go?
Some may be wondering what happened to Rural Development (RD) loans…
RD loans provide 100% financing at reasonable interest rates for buyers looking in specific rural areas.
Funding for USDA Rural Development loans ran out earlier this year. Funds usually run out early each year, since this is one of the only 100% financing loan programs available to borrowers. Congress is working to make some changes to the funding of this program, so that funds won’t run out (the program would end up being similar to FHA or VA, where there is a percentage funding fee paid added to the loan amount at closing).
This is what has been happening the past few months:
The House passed the Senate version of the bill, but they added an amendment for additional funding. The Senate voted last week to invoke Cloture, stop the filibustering, and accept the House version of the bill, but that vote fell short with 46 of the 60 votes needed.
So…the bill is back in the House, and the action reverts to them (the House).
I will post any new developments as they happen.
RD loans provide 100% financing at reasonable interest rates for buyers looking in specific rural areas.
Funding for USDA Rural Development loans ran out earlier this year. Funds usually run out early each year, since this is one of the only 100% financing loan programs available to borrowers. Congress is working to make some changes to the funding of this program, so that funds won’t run out (the program would end up being similar to FHA or VA, where there is a percentage funding fee paid added to the loan amount at closing).
This is what has been happening the past few months:
The House passed the Senate version of the bill, but they added an amendment for additional funding. The Senate voted last week to invoke Cloture, stop the filibustering, and accept the House version of the bill, but that vote fell short with 46 of the 60 votes needed.
So…the bill is back in the House, and the action reverts to them (the House).
I will post any new developments as they happen.
Monday, July 12, 2010
Ohio Housing Finance Agency has revised interest rates for first time homebuyers - great rates, great programs!
4.75% for loans without 2.5% assistance grant
5.25% for loans with 2.5% assistance grant
4.50% for Ohio Heroes without 2.5% assistance grant
5.00% for Ohio Heroes with 2.5% assistance grant
4.75% for Grant for Grads 2.5% assistance grant
This is a 30 year fixed rate. FHA/VA/USDA-RD loans are eligible. Effective 7/8/2010.
Please contact me for specific program details. Call me at (513) 520-6044 or email: bahale1@gmail.com
4.75% for loans without 2.5% assistance grant
5.25% for loans with 2.5% assistance grant
4.50% for Ohio Heroes without 2.5% assistance grant
5.00% for Ohio Heroes with 2.5% assistance grant
4.75% for Grant for Grads 2.5% assistance grant
This is a 30 year fixed rate. FHA/VA/USDA-RD loans are eligible. Effective 7/8/2010.
Please contact me for specific program details. Call me at (513) 520-6044 or email: bahale1@gmail.com
Thursday, July 1, 2010
Tax Credit Extension
The tax credit extending the date to close a purchase transaction has passed Congress. Homebuyers must have been under a fully executed purchase contract on or before April 30, 2010 to qualify for the tax credit. President Obama is expected to sign this measure later this week.
Tuesday, May 18, 2010
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