FHA loans getting cheaper

Guest Blogger: Today's post is written by Sacramento Mortgage Expert, Matt Gouge.  All of his contact info and more can be found at this website: www.mattthemortgageguy.com. Thank you Matt for providing this great info for potential buyers in our Sacramento Real Estate Market.

FHA’s reduction of mortgage insurance premium – What does that mean?

When you heard the announcement that FHA will reduce its annual mortgage insurance premiums from 1.35% to 0.85% it sounded good, but perhaps you don’t know what that really translates to. Allow Matt The Mortgage Guy to simplify it.

The purpose of an FHA-insured loan is to encourage home-ownership, even among people who may have small down payments or poor credit. It does so by federally insuring the loan, which defrays some of the risk from the lending institution. With this extra risk they take on these loans they charge an annual mortgage insurance premium (MIP).

Here is an example of the change*:

Pre-change: If you borrow $250,000 using an FHA loan your annual MIP (1.35%) would be $3375  ($281/mo)

Post change: You borrow the same $250,000 with an FHA loan but your annual MIP (0.85%) is $2125  ($177/mo)

It may not seem like a huge deal but for folks buying their first home or bouncing back from the market crash, this $100/mo could be the difference between renting and buying.

This change, in my opinion, was long overdue. In order to support the housing markets recovery FHA needs to make their loans affordable to those who utilize this financing option. This is another step in the right direction and one that will help millions of homeowners in the coming years. Good on you FHA!

If you or someone you know is looking into buying and you want to know all of your options, (many of which require very little down payment), I encourage you to reach out to a mortgage professional. You may be surprised to learn that you are ready to take that exciting leap of becoming a homeowner.

*Effective January 26, 2015

Connecting people and homes, one loan at a time…

#MattTheMortgageGuy

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www.mattthemortgageguy.com

Thanks again Matt for your guest blog post.

Connect with Doug Reynolds Real Estate via Facebook, YouTube, and Follow his Blog.

clear skies,
Doug Reynolds
Realtor

916-494-8441

doug.reynolds@BHGhome.com 

         

www.BuyWithDoug.com

www.CollegeGlenRealEstate.com

FHA now accepting E-Signatures on Real Estate Contracts

This is great news for the real estate industry.  It is so standard now days for everyone (agents/buyers/sellers) to be using electronic signatures (ie DocuSign).  Thankfully FHA is adapting with the times and showing a willingness to accept e-sigs moving forward.  This just saves everyone involved in a real estate transaction one less step.  Below is a short article about the news.

Connect with Doug Reynolds Real Estate via Facebook, YouTube, and Follow his Blog.

clear skies,

Doug Reynolds

Realtor

916-494-8441

 

www.SellWithDoug.com

www.BHGshortsales.com 

www.CollegeGlenRealEstate.com

FHA Moves to Accept E-Signatures

DAILY REAL ESTATE NEWS | FRIDAY, JANUARY 31, 2014

The Federal Housing Administration announced that it will allow lenders to start accepting electronic signatures on mortgage loan documents. The FHA will accept the e-signatures on third-party documents, such as sales contracts and other documents not controlled by the lender. This also includes REO sales contracts.

The new policy is effective immediately.

“By extending our acceptance of electronic signatures on the majority of single-family documents, we are bringing our requirements into alignment with common industry practices,” says FHA Commissioner Carol Galante. “This extension will not only make it easier for lenders to work with the FHA, it also allows for greater efficiency in the homebuying and loss mitigation process.”

The FHA says it believes the acceptance of e-signatures will help streamline the loan origination process and help reduce document submission time frames for borrowers who are seeking options to avoid foreclosure too.

As part of this new policy, the FHA will not yet accept e-signatures on the mortgage note itself. However, the FHA says it plans to accept e-signatures on mortgage notes by the end of the year.

Changes in F.H.A. Fees

As the cost of FHA financing continues to go up, Conventional financing is gaining more and more traction with First Time home Buyers.  I have an excellent loan officer that offers 5% conventional financing that ends up being a better loan product in most cases than FHA.

FEES charged on mortgages backed by the Federal Housing Administration are set to change this spring; they’ll go up for some and down for others.

In a nutshell, here is what’s happening: Fees for refinancing will fall sharply, as the upfront mortgage insurance decreases to 0.01 percent of the base loan amount, from 1 percent, starting on June 11. For buyers, the upfront mortgage insurance premium will increase to 1.7 percent of the loan amount, from 1 percent, effective April 9, and annual insurance costs, paid monthly, will rise 0.10 percentage points. Those with so-called jumbo loans, those above $625,500, will see a 0.35-percentage-point jump in the annual insurance premium, effective June 1.

The F.H.A. announced these changes over the last several weeks; they reflect an Obama administration initiative to make refinancing easier and more affordable for the three million or so homeowners with F.H.A. mortgages. The reduction in refinancing fees applies to those borrowers who are current on payments.

clear skies,
Doug Reynolds
 
www.BHGshortsales.com

FHA TAKES ADDITIONAL STEPS TO BOLSTER CAPITAL RESERVES

New premium structure will help protect FHA’s MMI fund

WASHINGTON – As part of ongoing efforts to encourage the return of private capital in the residential mortgage market and strengthen the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund,

Acting FHA Commissioner Carol Galante today announced a new premium structure for FHA-insured single family mortgage loans. FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under

$625,500 and by 0.35 percent for loans above that amount. Upfront premiums (UFMIP) will also increase by 0.75 percent.

These premium changes will impact new loans insured by FHA beginning in April and June of 2012. Details will soon be published in a Mortgagee Letter to FHA-approved lenders. “After careful analysis of the market and the health of the MMI fund, we have determined that it is appropriate to increase mortgage insurance premiums in order to help protect our capital reserves and to continue encouraging the return of private capital to the housing market,” said Galante. “These modest increases are one of several measures we are taking towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain a valuable option for low- to moderate-income borrowers.”

The Temporary Payroll Tax Cut Continuation Act of 2011 requires FHA to increase the annual MIP it collects by 0.10 percent. This change is effective for case numbers assigned on or after April 1, 2012. FHA is also exercising its statutory authority to add an additional 0.25 percent to mortgages exceeding $625,500. This change is effective for case numbers assigned on or after June 1, 2012.

The UFMIP will be increased from 1 percent to 1.75 percent of the base loan amount. This increase applies regardless of the amortization term or LTV ratio. FHA will continue to permit financing of this charge into the mortgage. This change is effective for case numbers assigned on or after April 1, 2012. FHA estimates that the increase to the upfront premium will cost new borrowers an average of approximately $5 more per month. These marginal increases are affordable for nearly all homebuyers who would qualify for a new mortgage loan. Borrowers already in an FHAinsured mortgage, Home Equity Conversion Mortgage (HECM), and special loan programs outlined in FHA’s forthcoming Mortgagee Letter will not be impacted by the pricing changes announced today.

Taken together, these premium changes will enable FHA to increase revenues at a time that is critical to the ongoing stability of its Mutual Mortgage Insurance (MMI) Fund, contributing more than $1 billion to the Fund, based on current volume projections through Fiscal Year 2013.

clear skies,

Doug Reynolds

 

www.BHGshortsales.com