FHA is undoubtedly the most popular financing program for today’s homebuyers.  It’s the “go to” loan for first time homebuyers,  growing families and empty nesters alike.  Over the past 2 years there have been many changes to the face of FHA financing … unfortunately few of those changes have been in the favor of a potential home buyer.  Hmmmm, something’s wrong with that picture on many levels.

So, today I bring good news and bad news.

First, the bad news … FHA is changing their private mortgage insurance requirements once again.  The current FHA PMI is .9% of the loan amount.  That .9% is now increasing to 1.15%.  Please refrain from throwing rotten food my way … it wasn’t my idea folks!  (Putting that into perspective, on a purchase price of $163,000 your monthly mortgage payment will increase by $33).

Now, the good news … you have time to lock in on the lower FHA private mortgage insurance, but you have to hurry.  If a home buyer

If buying a home is on your goals list for 2011, there are a few things you need to know.

1.       This is an exciting time, so get excited, dream big and imagine the possibilities!

2.      Credit requirements are stricter than ever before for financing a home.

3.      Now is the time to build your credit!

And this post is here to help you with #3 – building your credit.

Check your mailbox . . . you probably have a solicitation from an unknown mortgage lender with an enticing offer for a refinance.  Refinancing to a lower interest rate can be a GREAT thing; but not always!

Ready for a lender to be honest with you instead of give you a sales pitch?  I’m here to tell you the truth about refinancing.  There are 2 numbers you should focus on:

Home financing can be an intimidating topic - Stuffy lenders sitting across a big desk with a DENIED stamp may have been in your recent nightmares.  You have questions, you need answers.  I'm here to HELP you, not intimidate you (and I threw away my DENIED stamp years ago!)

How do I get pre-approved?
I’m here to make the pre-approval process fast and simple (and best of all, it’s FREE).  With a short phone conversation, I can provide you with your credit rating, and the approximate amount you qualify for.  What does it take to get pre-approved?  Not as much as you might think!

Let’s face it, there is an overwhelming amount of paperwork required to obtain a VA loan.  You may be digging through boxes in storage for months!  But, I have a bit of good news for Veterans searching for their DD214 (Certificate of Discharge from Active Duty) . . . you can now request this form online quickly, easily and free!!!!

Mortgage Rates Begin To Move Higher

Stronger than expected economic data pushed mortgage rates a bit higher again this week. Following a string of weekly drops since the middle of June, mortgage rates have now risen for two straight weeks.

Over the summer, mortgage rates have fallen substantially. Weaker than expected economic reports and the debt crisis in smaller European countries caused investors to reduce their forecasts for economic growth and produced a flight to the relative safety of government guaranteed bonds, resulting in the lowest mortgage rates in decades. Now, however, some investors are asking whether they can fall further. Weaker than average economic growth, low inflation, and an "unusually uncertain" economic outlook still make the current environment supportive of low mortgage rates, but some investors feel that these factors have been fully "priced in." These investors feel that economic growth must falter significantly for mortgage rates to drop much from here.

Until you "lock" your interest rate, it continues to float with market conditions and in this case it's floating up, up, up.  To lock your rate you must have a purchase contract on a specific property and communicate your wishes to secure today's rates.  My best advice for anyone home-buyer on the prowl for a mortgage or home-owner in the market for a refinance . . . lock in your great interest rate immediately!  That was free advice right there . . . who says nothing in life is free?  Yip, you're welcome, that advice may have saved you thousands and that's what I'm here for my friends!

Congress has taken quick action and passed H.R. 5981 which gives FHA the authority to adjust it’s annual mortgage insurance premium to strengthen the FHA Mortgage Insurance Fund back to a healthy level.  Hmmm . . . translation please.

The GOOD:
FHA’s upfront mortgage insurance premium (which is typically financed) will be reduced drastically from 2.25% to 1.0%.  Yip, that’s a good thing!

The BAD:
While they’re decreasing one fee, they are increasing another.  The FHA annual mortgage insurance (this is reflected in the monthly payment as PMI) is increasing from .55% to .90%.  OUCH!

The UGLY:
If all that made absolutely no sense to you, ah don’t be discouraged, it doesn’t make sense to our own Congress at times.  Here’s the skinny . . .

On a sales price of $200,000 using FHA financing with the minimum down payment of 3.5%, the home buyer’s total monthly payment increases $44 when the good and bad are compiled.  $44 per month is the equivalent of $8000 in sales price reduction. 

The CONCLUSION:
As of October 4, 2010, home buyer’s utilizing FHA financing will qualify for less.  Basically you just went from 2,000 square feet of living space to 1,800 – ahhh, your kids can share a room, right?

There’s time to secure the current lower total monthly payment, so don’t delay!!!!  Who ya gonna call, Ghost Busters . . . no, Pamela Crim!



Now, how can I assist your family?  I truly look forward to getting to know you!