Once again, there are some significant changes in store for FHA loans. In an effort to rebuild its reserves back to the 2% mark, the FHA mortgage insurance premium (MIP) schedule is changing for the 7th time in just five years. Not only will the monthly insurance increase, FHA announced a major revision regarding the cancellation of its mortgage insurance. Before getting into the specific changes about to take effect for FHA mortgages, here’s a brief recap of exactly who the FHA is and what the FHA does for homeowners. The Federal Housing Administration (FHA) is a government agency which insures mortgage lenders against loan defaults. The FHA does NOT lend money, they insure it. Since its inception in 1934, the FHA has insured over 40 million home mortgages, making the FHA the … [Read more...]
What are Interest Rates?
As we head into the Thanksgiving Day weekend, people are already forming lines, plotting their course for Black Friday and doorbuster deals. For the potential homeowners looking to buy and the current homeowners considering a refinance, they’re more interested in a map with a whole different set of coordinates - a map that can help navigate the complex world of mortgage rates. What are mortgage interest rates? What causes them to rise or fall? Is it the Federal Reserve? How much does the economy impact rates? What about the Presidential election? If anyone tells you mortgage rates are based on any single element, you may want to get your mortgage advice elsewhere. Interest rate movement is based on a large number of related factors including media headlines, … [Read more...]
Choosing the Right Mortgage Loan
With record low interest rates and housing on the rise, more and more folks have been venturing out to shop for a mortgage. In today’s ever-changing mortgage landscape you can rely on one major constant - nothing stays the same for long. This holds especially true for mortgage underwriting guidelines. New rules and additional requirements seem to change at any given moment. Figuring out which mortgage best suits your needs can be confusing, especially if you qualify for more than one type of loan. So what are the main types of loan programs available to consumers in today’s mortgage market? Conventional Loan Conventional loans are generally offered by a bank and are not guaranteed or insured by the federal government. Due to the lack of government backing, … [Read more...]
How Credit Scores Affect Mortgages and Rates
When it comes to qualifying for a mortgage loan, underwriters will look very closely at three main areas – credit, income and down payment. A better understanding of the role your credit scores play in the mortgage process is a must. Not only for those who are, shall we say credit score-challenged, but also for those who think they have excellent credit. Much has changed in the world of mortgage lending – a 720 isn’t what it used to be. While the thought of finances can give many folks a headache and even seem like a hassle, not knowing your credit scores can cause you to overpay for your mortgage. By understanding your credit rating and what impacts your scores, you can proactively take a few easy steps to prevent future headaches when obtaining a … [Read more...]
Increase to FHA Mortgage Insurance – April 2012
In our current economy, there are many homebuyers that find FHA’s low down payment option of just 3.5% very attractive, especially first time homebuyers. For that reason there are many folks who need to know about the changes soon to take effect for this government insured loan. The Federal Housing Administration (FHA) is increasing its Mortgage Insurance Premiums (MIP). Sound familiar? Last April, FHA’s Mortgage Insurance Premiums increased and as a result, some homebuyers were knocked out of the market. This year's increase may not be as substantial as last year’s but it will still have a considerable effect to monthly mortgage payments. As of April 9, 2012 FHA will increase both the monthly Mortgage Insurance Premium as well as its Annual Premium (if you have interest … [Read more...]
