Best Mortgage and Home Loans » FHA

What is a “no cost” FHA Loan?

admin — Mon, 19 Oct 2009 23:17:29 +0000

The closest thing to a no cost FHA loan is a streamline refinance though this is changing very soon just like so many other things in the loan and mortgage world. A streamline has been done in the past without an appraisal and credit is pulled to verify that the mortgage has been paid over the last 12 months on time. I have read through several of the changes on this loan and will post more once I have the total picture but even the way it was has a cost.

What most people are referring to as a “no cost” loan is a loan where you don;t have to come out of your pocket with money in order to get it closed at a better rate. The problem with this is that is does actually cost you money at some point. The money is coming out of your equity and most people don’t count that as actual dollars but they should! When you sell your house, those dollars are lost in fees and costs for the loan and you won’t get them back. Unless you have a really large reduction on your rate or stay in your house and don’t refinance again and pay it off in full you run the risk of never recovering your money. Make sure your loan officer goes over the true cost of the loan before you ever close it; purchase or refi.

FHA Loans is Once Again a Winner

admin — Sat, 13 Dec 2008 00:09:31 +0000

Not long ago, loan officers were laughed at if they recommended their clients go with a FHA loan. Most Realtors and customers alike were under the impression that a FHA loan was harder to close and harder to get an appraisal approved. Though that was true at one time, over the last three to five years FHA has been slowly changing into a very viable and competitive loan for first time homeowners as well as those looking to refinance at the lower interest rates.

Here are just a few things about FHA to consider when looking into loans.

Interest Rates are competitive
Mortgage Insurance factor is lower
Currently has a higher cash out ratio
Currently has less restrictions and cost associated with credit scores
Appraisals are equivalent to conventional appraisals
Required to put less money down

Any of these can change tomorrow so you will need to stay in touch with your loan officer and make sure these guidelines are still in effect.

More FHA Changes Coming

admin — Sun, 02 Nov 2008 23:35:55 +0000

The government continues to make changes to the FHA program and the people I have talked to don’t think the changes are over with as of yet. Though these changes are supposed to help people continue to get into homes and to protect them, I’m not sure there are any changes that can protect you more than good basic knowledge of how to purchase a house.

I met a young lady today that has a good deal of knowledge because she took the time to attend a first time home buyer’s class. Though it was on a day that she had many other things that she would have rather done, she took the class. I asked her if there was anyone in the class that she felt didn’t need the class and after pausing and thinking about her fellow students told me every one of the people needed the class.

Please, whether you are a first time home buyer or not, if you have never set in on one of these classes and are looking to purchase a home over the next year or so, find a class and attend. You may know some of it and get a little bored but overall, you will not regret it. Untimely, it is up to you to protect yourself from the unscrupulous that still exist in the real estate business.

Go to the Source if You Have Questions

admin — Thu, 23 Oct 2008 03:46:32 +0000

One of the best places for anyone to go for the real answers is the official FHA (Federal Housing Administration) website; HUD.com. The only challenge is to figure out which section proteins to your question or concern. It is easier if you look to the left hand side of the page and choose the topic closest to yours.

There are sections to buy a home, sell a home, owning a home and renting a home. There are also sections on specialized FHA programs for section 8 and homeless as well as renovation loans and how to avoid foreclosures. This resource gives you a lot of information on what is available from the government to current home owners and potential home buyers as well as how to protect yourself if you are selling your home.

You are ultimately responsible to know what is out here and available to you and the HUD website is a great way to start educating yourself. Nothing will take the place of having this knowledge and you will know what to look for and what to avoid when dealing with the purchase and sale of your next home.

The Predators Are Out Again

admin — Fri, 17 Oct 2008 18:21:51 +0000

In the last week I have had three of my past clients call me because they had received either a letter in the mail or a phone call from someone promising them to better their interest rate and payment through a refinancing their current home loan. Each one of these families have either purchased or refinanced a home within the last 18 months and all of them have good, high 700 credit scores and 15 year or 30 year fixed mortgages. Two have FHA and the third a conventional without MI (Mortgage Insurance) because they put 20% down on their loan.

None of these families fall into the sub-prime category; none of these families have ARM loans that will readjust and none of these families have been in their homes long enough under the current economic situation to have acquired enough equity to compensate for the fees associated with a refinance, even a streamline FHA. So why are these families getting called?

Because they have good credit, a good job and they are perceived to be uneducated with the process. What the lenders didn’t know about these three families is they have me for a lender. That’s not to say that I’m the only lender that looks out for my current and past clients because there are many loan officers like me, we just get overlooked because of the bad seeds in our industry.

The problem is they are not doing anything that is illegal. A lender can talk to anyone and if they get your permission to refinance your loan, no matter how much it costs you, they can do it. It is up to you to protect yourself and understand that the interest rate is not the only thing to look at when getting a loan. You need to look at the fees and the overall cost versus the time it will take you to recuperate them at the rate that is quoted. If you don’t understand this, do not do anything until you do.

Feds Cut Rate Again by .500

admin — Thu, 09 Oct 2008 19:55:48 +0000

I have already been called this morning and asked if interest rates are going to fall again. My answer, I have no idea. Interest rates are not following normal historical indicators so no one that I know feels confident in predicting what might happen. It also takes anywhere from 6 to 12 months for a rate reduction to work itself through the system.

We all feel strongly that the long term recovery will come and it is apparent that the world banking systems are doing all they know to do to get us turned around and moving in the right direction. Personally, I feel fear is the worst place we can go right now as fear tends to paralyze people in thought and creativity and I don’t think we can afford to go there.

Here’s what I do know, I am doing mortgages and getting great rates as are my associates. If you are a first time homeowner, there are still great programs in the market for you. If you own a home and have an ARM loan that is going to reset, there are options for you through FHA and THDA. There are programs and people who are here for you but you must do your part as well. You must have a good payment, work and income history and be responsible to do your homework as to what is expected from you.

If you do nothing else, find and take a first time homeowner class. Also find a deal with a lender who cares about you and doesn’t sound like a used car salesman. You know the type; “What will it take to get you into a loan today?” You must be careful.

THDA Great Rate Program

admin — Sun, 05 Oct 2008 21:45:10 +0000

The THDA Great Rate program is a program designed for those who either have 3 to 5% of their own money to put down or an expectable gift from an approved relative to cover the required down payment.

It is called the Great Rate program because it has the best rate of all the first time buyer programs. You are rewarded with a good rate for being able to put your own money into the transaction and you are not required to take the Home Buyer Education class, though it is still highly recommended as you will get some great information and guidance through this education.

All other income and acquisition guidelines for these programs apply and you must use an approved THDA lender to carry out the transaction. The base loan can be either a FHA, VA or conventional and you will need to check with your lender to obtain the current THDA rates for this and the other two programs.

THDA Great Start Program

admin — Thu, 02 Oct 2008 17:15:48 +0000

I want to do a series of blogs in regard to the THDA loan programs for first time home buyers. These programs are designed to help first time home buyers within a certain income ranges to purchase a home at a good interest rate. The first one I want to look at is the Great Start Program.

This program is for those families who need help with down payment and closing costs in order to get into a home and you can get a grant up to 4%. You will need to have a job that shows income and W-2′s over the last two years as well as one years tax return or own a business that has at least two years of tax returns showing income to qualify. There are income restrictions, depending on how many people are living in the home and location, so do check with your lender before you move forward.

The current rate can change at any time so check with your lender to find out what the rate is today. This loan is a 30 year fixed and has a requirement that you must go through the Home buyer Education class. Again, check with your lender to get a full explanation of the recapture tax as well as the best loan of this type, be it FHA, VA or conventional.