Atlanta FHA Mortgage Payments Increasing

HUD has announced that for case numbers assigned on and after April 18, 2011, the monthly MIP will be increasing by 0.25% annually on all loans. The reason given by HUD for the increase is to keep the FHA Mutual Mortgage Insurance Fund financially sound. With all of the foreclosures over the past two years, the fund has been depleted and this move is made to increase the reserve.

For potential home buyers who have a short time horizon to purchase, every effort should be made to get a signed contract prior to 4/18 so that your lender can have a case number assigned. Don’t just assume that your lender knows about this deadline, follow up with them to ensure that they provide you with a copy of the case number assignment so that you know you are protected. Also note that you must have a property selected in order to get a case number.

What is the impact of the change?

For every $100k borrowed, your monthly payment will increase by $20.83 per month. So, if you are borrowing $250k, multiply $20.83 by 2.5 which results in a monthly payment increase of $52.08. Below are the specifics of the change from HUD.

FHA Changing Monthly MIP rates……Again

Just a few short months removed from the last increase in the monthly MIP, here we go again.  The last increase took us from 0.55% to 0.90% (annually) on a 30 year fixed with 3.5% down.  This next increase is an accross the board 0.25% increase, so this will take us from 0.90% to 1.15% on a 30 year fixed. 

What does this mean in terms of your monthly payment?

For each $100,000 borrowed on an FHA loan, your monthly payment will increase by $20.83.  In Atlanta, Georgia using the maximum FHA mortgage amount of $346,250, that would mean a monthly payment increase of $72.14 per month.

Why is this increasing?

The word is that the FHA reserve fund continues to head in the wrong direction and they will continue to make these types of course corrections until they stop the bleeding.

How can I avoid this increase?

There is still time to avoid the increase.  You will need to obtain an FHA case number on or before April 17, 2010.  That means that you will need to determine which property you are purchasing prior to that to avoid the increase – or if you are refinancing, you will need to start the process and have your lender order a case number before this date.

Posted via email from tararyan’s posterous

Fannie Mae Homepath Mortgage

Envoy Mortgage is now offering the Fannie Mae Homepath mortgage. This exciting program allows you to purchase certain Fannie Mae owned foreclosure properties using a special financing tool. The Homepath financing has the following features:

• Only 5% down payment required for a primary residence (minimum 660 credit score and 2 months reserves)
• No Mortgage Insurance
• No Appraisal Required
• 2nd homes allowed with no mortgage insurance and only 10% down
• Investment properties allowed with no mortgage insurance and only 15% down (minimum 700 credit score and 6 months reserves)

Please note that there is no appraisal required on this loan and there is no mortgage insurance required. That provides for a significant closing cost savings, a great monthly payment savings, and a very streamlined loan approval process. Appraisals are the single largest roadblock today in securing financing, so to have that removed is very important. And it will make your Realtor very happy.

How do I find an eligible property?

It’s very simple. Visit the Fannie Mae Homepath website to search for a property and look for the Homepath Financing Logo.

Let us know what questions we can answer by filling out our contact form.

Loan Level Pricing Adjustments (LLPA) – What do these changes mean to you?

Fannie Mae and Freddie Mac currently are providing approximately 50% of the new purchase loans today. If you have a high credit score and at least 5% down, then chances are that you are ultimately going to be getting your loan from either Fannie or Freddie. Yes, you will still deal with a bank or broker to initiate the loan, however, after closing your loan will ultimately be backed by one of these two agencies.

Recently, changes were announced regarding the loan level pricing adjusters coming from Fannie and Freddie. These are adjustments that are passed down from Fannie and Freddie to the mortgage lenders and they directly impact the closing costs (or sometimes rate) that a borrower gets on a loan. Looking at the bottom of this article, you will see the old and new LLPA’s from Fannie and Freddie.

To illustrate what these recent changes mean to you, an example would be best:

Assume that you have a middle credit score of 780 (anything over a 740 is superb) and that you are putting down 20% on a new home purchase. Your purchase price is $250,000, you are putting down $50,000, leaving a loan amount of $200,000. Assume that you are getting the standard 30 year fixed loan. In the old days, this was considered a nearly perfect borrower and there were no costs associated. You can see this in the “Current Adjustments” section. 740+ was an adjustment of 0.000. But now, the new adjustment is 0.250. What does that mean in terms of dollars to you? That’s 0.250% of the loan amount, so in this case, your closing costs would be $500 higher that a borrower who was putting down 25%. You can see that at a loan to value of 75%, the adjustment goes back to 0.000.

It gets worse, however, let’s take another borrower who is putting down only 10% on a $222,222 purchase (down payment of $22,222 and a loan amount of $200,000 again) and their credit score is a 739. That’s still an excellent score and prior to this month, this borrower would not pay anything extra to Fannie Mae or Freddie Mac (though they would have mortgage insurance since they are putting down less than 20%). However, under the new model, they are now paying for an adjustment of 0.500%, which on a $200,000 loan would be $1000 of additional closing costs.

The credit markets continue to become tighter and as long as that is the case, we’re going to struggle to see any improvement in the sagging real estate market. Make sure that you are working with someone who can show you a number of options to ensure that you are getting the best rate and closing cost combination for your particular situation. There are ways around these LLPAs, however, each borrower’s situation is unique.

Envoy Mortgage Receives Green Originator of the Year Award for 2010

Envoy Mortgage Green Technology Award from Envoy Mortgage – Norwalk, Ohio on Vimeo.

The Ryan Mortgage team is proud to be a part of Envoy and their dedication to using technology to improve the overall mortgage experience.

Envoy Mortgage was recently awarded the Green Originator Award by Mortgage Technology magazine for its electronic, paperless loan origination process at the 12th Annual Mortgage Technology Awards 2010 at the Mortgage Bankers Association’s 97th Annual Convention & Expo 2010 in Atlanta. The award is granted annually to a mortgage lender that uses technology to create efficiencies, both from a business perspective as well as to help the environment.