Posts Tagged ‘FHA’

FHA Mortgage News for the New Year

January 12, 2015

fha_loan_limitsGreat news! FHA loan limits for the major counties in Georgia increased from $320,850 to $342,700 for all new FHA sales contracts written on or after Jan. 1, 2015. This gives homebuyers the opportunity to buy a home with a 3.5% down payment (all from a gift) and FHA has relaxed qualifying guidelines on homes $21,850 more expensive than last year.

The bad news is that the FHA Anti-Flipping Waiver expired on Dec. 31, 2014. Some folks might say, “What Anti-Flipping Waiver?” Many thought a seller had to have owned the home for 90+ days before selling it to a new buyer using FHA financing.

Well, you’re not totally right or wrong. Even though HUD introduced the Anti Flipping Waiver in February 2010 and extended it to December 2014, many FHA lenders and banks ignored the waiver guidelines and continued to require that the seller hold title to the home a minimum of 90 days before re-selling it to a buyer using FHA financing. Since HUD (FHA) only insures loans and FHA approved Lenders actually lend the money, FHA Lenders often have different guidelines than HUD’s guidelines for FHA Insurance purposes. (more…)

The Return of the 97% Conventional Mortgage Loan

December 22, 2014

return_of_97_loanDuring the “anything-goes” mortgage days, 97% LTV (3% down payment) mortgages were readily available to homebuyers. In fact, a 97% LTV wasn’t a big deal since many mortgage lenders were offering the 100% mortgages. Then the mortgage foreclosure crisis hit and the mortgage industry experienced extreme new regulation and tightening of loan programs.

Over a year ago in December 2013, Fannie Mae and Freddie Mac both announced that their specialty First Time Homebuyer 3% Down Payment loan Programs were also being discontinued. Now, almost one year to the date, both Fannie Mae and Freddie Mac have both announced the RETURN of the 97% Loan Programs for First Time Homebuyers. (more…)

FHA HAWK Program: Not Yet Approved, but Getting a Lot of Attention

July 21, 2014

FHA_HAWKThe new FHA HAWK (Homeowners Armed With Knowledge) Program designed to give homebuyers a discount on the FHA Mortgage Insurance Premium (MIP) in exchange for them taking approved Homebuyer Education Classes has been getting a lot of attention and press. Real estate professionals and homebuyers are beginning to inquire about how to apply for the HAWK Program.

The most important major detail that many of the articles and news reports are not making very clear is that the HAWK Program has not yet landed its final approval status and IS NOT available!

HUD’s current estimate is that phase one of the four-year, four-phase program should roll out winter of 2014 or spring of 2015.

Below are the basic program details if the program rolls out without any changes to the current program proposal: (more…)

FHA vs. Conventional: Which is the Better Option?

July 7, 2014

fha_or_conv_loanMany homebuyers are seeking a loan with very little down payment. If they aren’t eligible for a 100% VA or USDA loan, they have two choices: FHA with 3.5% down payment or Conventional with 5% down payment. Determining which is best can be challenging. There are pros and cons to both loan types.

Most people have heard that FHA loans are good because they offer lower interest rates and are easier to qualify for than Conventional loans.

This is true, but if the buyer can qualify for the Conventional loan, it could be cheaper overall, even if the interest rate is a bit higher. Remember, there is more to a monthly mortgage payment than the principle and interest payment. The big factor that separates FHA and Conventional loan monthly payments is the Private Mortgage Insurance for each loan type.

Let’s break down each loan type: (more…)

QM & ATR Rules: Good Intentions Have Unintended Consequences

February 17, 2014

new_mortgage_rulesThe year 2014 brought more than a blanket of ice and snow to the country! It brought some new Mortgage Rules that are part of the Dodd-Frank Financial Reform Law passed back in July of 2010. The Rules that came into effect on January 10, 2014 are referred to as the Qualified Mortgage (QM) and Ability to Repay (ATR) rules.

A major change due to the new QM rules is the 43% maximum Debt to Income Ratio if the loan doesn’t receive an approval in the Automated Underwriting Systems for Fannie Mae or Freddie Mac. A borrower making $4,000 per month who receives an approval in Desktop Underwriter – the Automated Underwriting System for Fannie Mae – could qualify with a Debt to Income Ratio as high as 50%. This same borrower would qualify for $56,000 LESS if they don’t receive an approval and are limited to the 43% DTI under QM based on current interest rates.

So here’s the Good and the Bad of the latest Financial Reform Rules that took effect Jan. 2014! (more…)

FHA Loan Limits to Decrease by $25k for Most Georgia Counties

December 16, 2013

fha_loan_limitsEffective Jan. 1, 2014, FHA loan limits for most of the counties in Georgia will drop from $346,250 to $320,850, a decrease of more than $25,000! This applies for all FHA forward purchase loans with FHA case numbers assigned on or after Jan. 1, 2014 through Dec. 31, 2014.

If you’re hoping to secure an FHA loan above the new $320,850 loan limit level, you better act fast! Homebuyers will need an accepted, signed Sales Contract; a full Loan Application; and signed and returned all documents to their FHA lender no later than December 20, 2013 in order to meet the deadline and allow time to have their FHA Case # request processed and issued before the deadline and the decreased loan limits come into effect. (more…)

Interest Rates – One Size DOES NOT Fit All

November 11, 2013

ice_cream_interest_rates“What are the current interest rates?” This is a very common question from real estate agents and buyers. Answering the question of what’s today’s interest rate is as difficult to answer as “What’s the price of a four bedroom home in the Atlanta area?” The answer to both of these questions is, “It depends!”  There are many factors that impact both of these numbers.

The price of four bedroom homes in the Atlanta market area ranges wildly based on location, actual size of the home, amenities of the subdivision, quality of construction and construction materials, and a very long list of other factors.

Interest rates also vary wildly based on the individual borrower’s credit score, loan to value, borrower’s assets, borrower’s income, borrower’s debts and loan options such as waiving escrows, and if the property is a condo.

Interest rates are like ice cream. The price of a plain vanilla cone is one price, but if you add hot fudge, nuts, fruit and cherries, the cost goes up! (more…)

Will My Deal Survive the Government Shutdown?

October 7, 2013

government_shutdownThe current shutdown of the U.S. Government could have an effect on contracts that you have pending or contracts that you write during the shutdown. Borrowers and agents should check with the specific Lender on each loan. Any sale that has a pending loan that was not fully approved and cleared to close with the closing package sent to the closing attorney as of midnight on Sep. 30 should expect delays to the closing. (more…)

FHA Increasing MIP on Apr. 1

March 11, 2013

fha-mip-changes-2013For the first half of 2013, the U.S. Department of Housing and Urban Development has made two major changes to their policies:

1. Monthly Mortgage Insurance Premiums (MIP) are scheduled to increase affective April 1, 2013. While Upfront MIP is remaining the same at 1.75%, Monthly MIP is changing from 1.25% to 1.35%.

2. June 3, 2013 the FHA will no longer allow an FHA borrower to cancel their mortgage insurance premium payments when the loan balance drops to 78% of the property’s value!

This is the fifth increase HUD has made to the FHA MIP cost in the past 3 years. In April of 2012, FHA increased the MIP rates from 1% to 1.75% on the Upfront MIP and from .90% to 1.25% on the Monthly MIP. (more…)

Top 10 Contract Mistakes for 2012!

January 14, 2013

contract_mistakesIt’s that time of year again! Time to recap 2012 and highlight the TOP 10 of pretty much anything you can think of. Here, we’ll reveal the “BHGRE Metro Brokers / Billboard Top 10 Contract Mistakes of 2012” and what you can do to prevent making those mistakes in 2013. Oh, and before you say, “But the seller’s a bank and they don’t do that!”, we removed all the REO deals from consideration before tabulating the final results. (more…)

Good News: Mortgage Debt Tax Relief Extended!

January 7, 2013

fiscal_cliffWhen lawmakers dodged the “fiscal cliff” last week, they also decided to extend the tax break for forgiven mortgage debt that was set to expire on Dec. 31, 2012. The Mortgage Forgiveness Debt Relief Act of 2007 has been especially important with the current glut of short sales and foreclosures, and it’s truly a “relief” that it has been extended until the end of 2013.

The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on Dec. 20, 2007. The Act protects homeowners from paying income taxes on the deficiency difference between what they sell their home for and what they owe. Whether the home is sold in a short sale or foreclosed upon by their lender, these distressed homeowners are protected by the Debt Relief Act of 2007. (more…)

My Tips for Preparing for 2013

October 15, 2012

An Editorial, the opinions expressed are not necessarily those of the management.

It’s October already! Where did the year go? Although 2012 is and has been a “better” year for real estate practitioners, most are still working very hard to keep that positive trend going.

A couple of things are working in our favor. Inventory is very low, meaning that decent properties will sell.  In much of our market area, properties priced under $200,000 are flying off the shelf after multiple offers. The media is now conveying the message that this is the time to buy. (more…)

FHA to Raise Mortgage Insurance Premiums on Apr. 1, 2012

March 19, 2012

HUD announced this month that they were raising the Mortgage Insurance Premiums (MIP) effective April 1, 2012. The Upfront MIP is changing from 1% to 1.75% and the Annual MIP is changing from .90% to 1.25%.

Before you panic about this bad news… the bottom line is that on a $100,000 FHA base loan amount, the payment will increase less than $7 per month as a result of both MIP premium increases. (more…)

Help is Here for Jobless Homeowners Nearing Foreclosure

July 25, 2011

There have been rumors and various news reports circulating that FHA will soon be allowing unemployed Americans who have an FHA insured mortgage to miss up to 1 year of mortgage payments without being foreclosed on.

My hope in writing this article is to provide more details on this topic that is sure to prompt more and more discussions and questions.

IMPORTANT: Please note that only the customer’s current lender can give them a final answer on if they qualify under this program. The number to call is on their mortgage payment coupons or monthly statements from their current lender. (more…)

Condo Complications: Some Issues With Condo Ownership

September 27, 2010

Condo Ownership is the perfect lifestyle for some, but not for others. If you’re thinking of buying a condominium, you must do your due diligence regarding the Condo CCR’s (Covenants, Conditions and Restrictions). Also important is the financial stability of the Condominium (Budget and amount in Reserve Account).

“Condominium” is a form of ownership, not a physical description. In Georgia, stacked flats, mid-rises and high-rises are almost always condominiums. However, town homes can be fee simple ownership or condominium ownership. In condominium ownership, the unit owner owns everything from the sheetrock in as well as from the floors up to the ceiling. The outer walls and roofs are commonly owned by and maintained by the HOA. The land is also commonly owned and maintained by the HOA. There have been cases where a contract is written up as fee simple, and at the last minute the closing attorney’s title report shows it as a condo, and the entire loan has to be redone, causing a long delay in the closing.  (more…)