Archive for 'Sellers'

FHA Loan limits and MIP Fees changed October 1st!

Posted on November 17, 2011, by , under Benson NC Mortgages, Buyers, Fayetteville NC Mortgages, FHA, First Time Home Buyer, Interest Rates, Jacksonville NC Mortgages, Main Section, Raleigh NC Mortgages, Refinance, Sellers, Wilmington NC Mortgages.

I thought it might be helpful to show the reduced loan limits and recent changes to FHA’s mortgage insurance program.  Effective October 1st, 2011, the loan limit for Wake county (Raleigh, Garner, Zebulon, Knightdale), Durham, Johnston (Clayton, Willow Spring, Fuquay Varina), Brunswick, Pender and most North Carolina counties have been reduced by HUD to $271,050 for a one unit property.

Pasquotank, Perquimans, and Camden county FHA loan limits are set at $625,500 and Dare county is the next highest at $391,000.  If anyone would like a detailed list by county please send me a request and I’ll be happy to send you the FHA loan limit chart.

The FHA upfront MIP fee is the same for all loans at 1%.  This fee is financed into the loan amount.  There is also an annual mortgage insurance premium charged which is financed into the monthly payment and is dependent on the loan-to-value and loan term.  Effective April 18th, 2011 they are as follows:

Terms greater than 15 years:

  • LTV > 95% 115 BPS (equal to 1.15% annually)
  • LTV < 95% 110 BPS (equal to 1.10% annually)

Terms 15 years or less:

  • LTV > 90%: 50 BPS
  • LTV > 78.01 to < 90%: 25 BPS
  • LTV < 78%  0.00 BPS (No charge)

As you can see, the annual insurance is much cheaper if you can afford to go with a 15 year mortgage over the 30 year.

Our current guidelines allow us to offer FHA loans with credit scores as low as 600.  With scores above 640 we are able to offer improved pricing.  There are four programs to chose using FHA:

  • 30 year fixed rate
  • 15 year fixed rate
  • 3/1 treasury ARM; 30 year amortization
  • 5/1 treasury ARM; 30 year amortization

FHA still requires a 3.5% down payment for purchase transactions and will refinances up to 97.75% of the appraised value allowing you to add closing costs and prepaids.  They will also allow a borrower to do a cash-out refinance up to 85% of the appraised value.   NC Housing is able to assist borrowers with an $8,000 down payment on FHA loans if they are first time home buyer (haven’t owned a home for past three years) and meet their income and credit quidelines.

As always, these figures and guidelines can change at any time.  If you should have questions about an FHA loan, please give me a call or send me an email.  Take care and God bless!

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Still a great time to refinance or buy!

Posted on November 16, 2011, by , under Sellers.

A client of mine just saved thousands! Rates are still at unbelievable lows! Until recently I never would have thought in my 20 years in mortgage finance I would see rates this low. I just closed a loan on a 5/1 ARM program with a rate of just 2.875% which will not change for the next 5 years! This is going to save this client thousands over the next few years.

I’m closing another one this week for clients that are upside down on their mortgage. They owe more than the house will appraise for but we were able to get it approved using Fannie Mae’s Refi Plus program which allows cumulative loan to values to 125%. This is another example where the clients are going to save multiple thousands in interest.

I am very happy to run a savings scenario for anyone interested which will show the break even point for how many months it will take to recoup closing costs. We also offer no-cost refinances as well which will start saving money immediately. It’s FREE and quick. Just give me a call or send me an email. God bless!

John

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Changes to FHA and USDA Mortgages

Posted on September 28, 2010, by , under Buyers, Fayetteville NC Mortgages, FHA, Jacksonville NC Mortgages, Main Section, Raleigh NC Mortgages, Refinance, Sellers, USDA Home Loans, Wilmington NC Mortgages.

Here are some new changes getting ready to take effect very soon.  The Mortgage Industry can definitely make a luddite go crazy!

New FHA MIP Fee Changes will take effect October 4th for FHA loans throughout North Carolina, including Raleigh, Wilmington, Fayetteville, Jacksonville, and Benson!  These changes will affact buyers as well as those wanting to refinance.

• Up Front MIP will decrease from 2.25% to 1%
• Annual MIP will increase from .50/.55 to .85/.90 for terms greater than 15 years.
• FHA will make the premium fee changes for all new case numbers effective October 4, 2010. (In order to avoid the Annual MIP increase, buyers will need a new FHA case number assigned before October 4th.)

The negative effect will be borrowers will not be able to qualify for as much of a loan with these changes.  Even though the Up Front Premium (MIP) is going down, the payments will increase for a same size loan due to the rise in the annual premiums.  This is par for the course with government trying to help the economy while the housing market is suffering so greatly.

We are still waiting to hear if the maximum seller credit will be reduced to 3% from the current 6% limit.  If this happens, FHA borrowers will also have to bring more money to the closing table to cover some of their closing costs.  Currently a borrower with the 6% limit can purchase a house with just their 3.5% down payment (was 3%) while having the seller pay all their closing costs.

This will affect lower income borrowers more so than those buying higher priced homes.  Most of the time, a 3% allowance for closing costs will not cover all the closing costs and prepaids for the lower loan amounts.

USDA changes:  The USDA Funding Fee for refinances will increase from .5% to 2.25% on October 1st.

These changes will also affect loans in Virginia, including Fairfax, Woodbridge, Dale City, Lake Ridge, King George, and Fredericksburg.  For the latest in updates or questions on recent changes, please contact me at jhester@primelending.com.

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Market Update 08-26-2010 – Raleigh NC Mortgages

Posted on August 26, 2010, by , under Buyers, Jacksonville NC Mortgages, Main Section, Raleigh NC Mortgages, Sellers, Wilmington NC Mortgages.

Weekly claims came out this morning with an unexpected drop of 31,000. The four week moving average was 486,750, which is an increase of 3,250. This wasn’t too much of a market mover, and bond pricing opened only slightly higher than yesterday’s close. We also just had the auctioning of $29Billion of 7 yrs, with the yield at 1.989% , a bid-to-cover of 2.98, and indirects in at 56.7%. Overall a nice auction. The treasury market has reacted favorable, but the MBS spreads are working against us… meaning that MBS pricing has not kept the pace with Treasuries.

Chris Cordry
VP Secondary Marketing
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900, Dallas, TX 75252

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