Archive for the 'FHA Mortgages' Category
August’s Fed Minutes Lead Mortgage Rates Higher
September 7th, 2010 categories: Buyers, FHA Mortgages, Market Trends, Mortgage Rates, Sellers
Home affordability took a slight hit this week after the Federal Reserve’s release of its August 10 meeting minutes.
The “Fed Minutes” is a lengthy, detailed recap of a Federal Open Market Committee meeting, not unlike the minutes published after a corporate conference, or condo association gathering. The Federal Reserve publishes its meeting minutes 3 weeks after a FOMC get-together.
The minutes are lengthy, too.
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How Much Should You Expect To Pay In Mortgage Closing Costs?
August 19th, 2010 categories: Adjustable Rate Mortgages, Budgeting, FHA Mortgages, Mortgage Guidelines, Mortgage Rates
How much does a mortgage cost? The answer depends on where you live. But no matter which your locale, chances are strong that you’ll pay more for a mortgage in 2010 as compared to 2009.
According to Bankrate.com and its annual Closing Cost Survey, a typical $200,000, purchase mortgage now carries an average $3,741 in closing costs — up nearly 37 percent from last year.
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Higher (And Lower) FHA Mortgage Insurance Premiums Start October 4, 2010
August 16th, 2010 categories: FHA Mortgages
For the second time this year, the FHA is modifying mortgage insurance.
Beginning with FHA case numbers issued on or after October 4, 2010, the FHA is changing its upfront and annual mortgage insurance premium structure.
Under the new terms, assuming a 30-year fixed rate FHA mortgage with at least 5 percent equity:
- Upfront MIP drops to 1.000% of the amount borrowed from 2.250%
- Annual MIP increases to 0.850% of the amount borrowed from 0.500%
For homeowners in Knoxville and everywhere else , this switch in MIP decreases the upfront cost of an FHA-insured mortgage, but increases the loan’s long-term costs.
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Yes, You Can Still Get A Mortgage If You’re Pregnant
July 23rd, 2010 categories: Buyers, FHA Mortgages, Mortgage Guidelines
The New York Times ran an important story this week concerning pregnancy and mortgage approvals. Titled “Need a Mortgage? Don’t Get Pregnant“, the article discussed the difficulties that expecting and recently-expanded families are having with their mortgage financing.
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Mandatory Loan Fees Keep Borrowers From Getting Their Absolute Lowest Rate
July 19th, 2010 categories: Buyers, FHA Mortgages, Home Values, Mortgage Rates
Conforming mortgage rates may be posting all-time lows this week, but that doesn’t mean you’ll be eligible for them. You may have already called your loan officer and found this out the hard way.
It’s because of a federally-mandated mortgage-pricing scheme known as “loan-level pricing adjustments”.
In effect since April 2009, loan-level pricing adjustments are changes to a loan’s base rate and/or fee structure based on that loan’s inherent risk to Wall Street. It’s similar to auto insurance pricing adjustment in that a sports car, all things equal, will cost more to insure than a comparably-priced minivan.
More risk, more cost.
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Loan Application Alert : Conforming, Interest Only Mortgages Guidelines Change Next Week
June 17th, 2010 categories: Buyers, FHA Mortgages, Household Finances, Market Trends, Mortgage Guidelines, Mortgage Rates
If you plan to finance your Farragut home with a conforming interest only mortgage, get your loan application submitted no later than this Friday, June 18.
Starting next week, Fannie Mae is clamping down on the popular loan product.
An “interest only” mortgage is exactly what its name implies — a mortgage for which the monthly payments consist entirely of interest with no principal reduction. Because there’s no amortization, payments are less costly on a month-to-month basis.
For example, assuming principal + interest payments at 5 percent, a $250,000 mortgage carries a monthly payment of $1,342. The payment on a comparable interest only mortgage, however, drops to $1,042.
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Good News For Sellers : Housing Starts Fall To 1-Year Low In May 2010
June 17th, 2010 categories: Buyers, Existing Home Sales, FHA Mortgages, Home Values, Housing Starts, Market Trends, Sellers
Single-family housing starts plummeted to a one-year low in May, just 30 days after soaring to a 20-month high. It’s no wonder home builders are confused.
Against a revised April figure, Housing Starts fell 97,000 units in May, a figure representing almost one-fifth of the total market size.
It’s the worst showing for Housing Starts since May 2009, a surprise to builders and economists alike.
Furthermore, single-family Building Permits plunged in May, too — down 10 percent from April. A permit is a certification from local government that authorizes home construction.
Housing permits are a precursor to Housing Starts with 82% of homes starting construction within 60 days of permit-issuance. Fewer permits, therefore, directly reduces the number of new homes coming to market in the coming months.
For home buyers in Knoxville , this should create a sense of urgency.
Home prices are based on supply and demand and supply appears to be falling about the same time that economists predict a surge in home demand. It could spell rising home prices and a complete loss of negotiation power with home sellers.
For now, though, home affordability remains high with properties cheap and mortgage rates near all-time lows. If you plan to buy a home later this year, the May 2010 Housing Starts data may be a reason to move up your timeframe a bit.
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FHA Mortgage Insurance Premiums Approved To Triple In Cost
June 17th, 2010 categories: Buyers, FHA Mortgages, Home Values, Household Finances, Market Trends, Mortgage Guidelines, Mortgage Rates
Starting sometime later this year, the monthly cost to carry an FHA-insured mortgage is expected to rise.
In a near-unanimous vote, the House of Representatives gave the FHA power to raise the monthly mortgage insurance premiums it charges to its borrowers.
Currently, monthly mortgage insurance premiums are 0.55% of the unpaid loan balance, divided by 12. The recently approved Federal Housing Administration Reform Act provides for an increase in monthly premium of up to 1.55 percent, among other details of the bill.
Despite the ability to charge 1.55 percent, FHA officials say an increase to 0.90 percent would be sufficient to self-insure its loans.
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Conforming Loan Costs Are Rising, Says Freddie Mac
June 9th, 2010 categories: Adjustable Rate Mortgages, Buyers, FHA Mortgages, Market Trends, Mortgage Guidelines, Mortgage Rates, Sellers
Mortgage rates may be dropping, but mortgage costs are not.
According to Freddie Mac, the average required discount points on a conforming mortgage rate are higher by 0.1 percent since early-May.
A “discount point” is prepaid mortgage interest; an up-front fee paid by a borrower in exchange for a lower mortgage rate. In most cases, discount points are tax-deductible.
Tax-deductible or not, though, rising costs are rising costs and Freddie Mac glosses over it. In its weekly press release, the government group offers mortgage rate comparisons to weeks prior, but doesn’t do the same for required points.
The press fails to mention discount points entirely.
An increase of 1/10 percent in discount points costs homebuyers and refinancing households in Maryville an extra $100 per $100,000 borrowed.
The hike reminds us that there’s more to a mortgage than just its rate — costs matter, too. And if you’ve only been watching the headlines, you would have missed how costs are rising.
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Fannie Mae’s Loan Quality Initiative : Repulling Your Credit Just Before Closing
June 8th, 2010 categories: Adjustable Rate Mortgages, Buyers, Existing Home Sales, FHA Mortgages, Market Trends, Mortgage Guidelines, Mortgage Rates
A new loan quality initiative from Fannie Mae is making it harder for Farragut home buyers and refinancing homeowners everywhere to close on a mortgage.
Beginning June 1, 2010, with all new applications, Fannie Mae wants lenders to verify that borrowers have not taken on new debt during the underwriting phase of the mortgage.
If new debts are found, the mortgage is subject to a re-underwrite and a possible turndown.
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