The Cost of FHA Loans Going Up On April 1st & June 3rd 2013

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FHA loans are a great way for some home buyers to get into a property with a low down payment, a good rate, and a higher debt to income ratio. The FHA loan program will be changing on April 1st, 2013 and June 3rd, 2013.

On all FHA loans with case numbers ordered on or after 04/01/2013, the monthly mortgage insurance premium (MIP) will increase by .10 for loan amounts under $625k.

Loan Term,LTV(%),Previous MIP Rate,New MIP Rate
Greater than 15yr term,down payment < 5%,1.25%,1.35%
Greater than 15yr term,down payment 5%-9%,1.20%,1.30%
Greater than 15yr term,down payment 10%-21%,1.20%,1.30%

 

On 06/03/2013, the length required to have monthly mortgage insurance is changing.

 

Loan Term,LTV(%),Previous MIP Duration,New MIP Duration
Less than or equal to 15 years,Less than or equal to 78%,5 years,11 years
Less than or equal to 15 years,Greater than 78% – 90%,Cancelled at 78% LTV,11 years
Less than or equal to 15 years,Greater than 90%,Cancelled at 78% LTV,Loan term
Greater than 15 years,Less than or equal to 78%,5 years,11 years
Greater than 15 years,Greater than 78% – 90%,Cancelled at 78% LTV & 5 years,11 years
Greater than 15 years,Greater than 90%,Cancelled at 78% LTV & 5 years,Loan term

 

What You Need To Know:

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  • Even with the increases, a FHA loan is still a great option. You just have to look at the numbers to make sure it works for you.
  • Look at conventional loan products as an alternative.  There are major banks who provide loans with high LTV’s.
  • Consider delaying your home purchase until you can put a larger down payment.

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Defined: Short Sales

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[tagline_box link=”” title=”Short Sale” description=”A short sale is when a home owner sales their property and the proceeds from the sale will be less than what is owed on the mortgage currently on the property. The home owner can not make up the difference in what they owe on the property, and the lender agrees to accept this less amount and release their lein on the property.”][/tagline_box]

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Are You Grown Up Enough To Buy A House

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You’re getting the itch to buy a home. You might have come to this decision based on any number of reasons… all your friends and co-workers are buying homes, your parents are telling you to buy your own place, or you might be thinking of starting your family in your own home. Whatever the reason, in addition to being financially ready to buy, you need to have the right mindset [Read more…]

MPR Video: Making Offers On Short Sales

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Short sales are an unfortunate part of today’s real estate environment.  It probably will continue to be for the foreseeable future.  A few years ago we created this video outlining some of the pitfalls and things to consider when making an offer on a short sale property.  It resonated with people, as it has received over 20k views.  Although it’s a few years old, the info presented is still pertinent.

[youtube id=”-aq8rdmYZG4″ width=”600″ height=”350″]

2013 FHA Changes You Need To Know

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The Federal Housing Administration (FHA) is facing the same fiscal crunch most government agencies are facing. As a result, they are going to make a few changes to their programs. If you plan on getting a FHA loan in 2013, you need to be aware of them. [Read more…]

Documents List For Loan Application

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The journey to buy a home is long, and is comprised of many smaller journeys. One of those journeys is the process of getting a loan. Usually, the process starts with applying for a loan directly through a bank or a mortgage broker.
To get the ball rolling, you will need to fill out a basic loan application. Additionally, you will have to provide copies of certain documents. These docs help provide a detailed snapshot of your employment and financial standing. Here is a list of the common documents loan professionals require: [Read more…]