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How Obamas Stimulus Helps Homeowners Refinance a Mortgage

January 18th, 2010

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President Obama knows homeowners need help. That is why he announced his $75 billion “Making Home Affordable” plan. This plan will allow nearly any homeowner to get a mortgage refinancing, save money, prevent a home from being lost, or all of these things. Here is how President Obamas stimulus plan is helping homeowners get a mortgage refinancing.

This program is all made possible because of the $75 billion that is being used to create new mortgage refinancing options for homeowners. This money is given to only approved mortgage lenders and banks who offer homeowners a refinancing option from Obamas stimulus. This is makes it possible for homeowners with all types of problems to find help and financial relief through new mortgage refinancing options.

Also, another use for this money is to keep mortgage interest rates low for all people. This has resulted in mortgage rates being near their record lows for most of 2009 and so far into 2010. These lower rates are they key to homeowners saving money, and preventing their home from being lost. Mortgage rates are less than half of what they were 10 years ago, and many people can take advantage of that fact and refinance to save a lot of money.

There has never been a Government stimulus plan this big that has the ability to help so many homeowners. Homeowners should take advantage of these new programs and refinance their home loans now. Do not believe that your situation is helpless, use Obamas plan for yourself today.

I have been underwriting mortgages for years. Recently, I got into a new business but I still wish to share my advice, tips, and industry inside happenings of the mortgage refinancing industry.
For more articles on Mortgage Refinance check out my website

Article Source:http://www.articlesbase.com/mortgage-articles/how-obamas-stimulus-helps-homeowners-refinance-a-mortgage-1743359.html

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FHA loan offers Florida homebuyers a low cost way to own a Florida home

January 14th, 2010

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Lowest costing FHA home loan.

Coming soon to FHA-mortgage loans will require Higher FICO scores and more cash at closing. The changes are needed to help keep the agency afloat.

FHA mortgage loans are about to become more expensive and harder to get for Florida FHA loan applicants.

The details will be revealed in late January. But this much already is clear: FHA Mortgage applicants will need higher credit scores and more cash at closing to get the lower interest rates and cheaper insurance of FHA mortgage loans and refinanced loans.

The rules are changing because the Federal Housing Administration is in a financial hole. It’s been paying out more to cover defaulted FHA mortgage loans than it’s taking in from mortgage-insurance premiums. The imbalance has drained agency reserves to 1.5% of the FHA mortgages it covers — below the 2% level required by law.

To cure the FHA insurance deficit President Barack Obama’s administration has announced it will tighten the FHA Loan requirements, making four changes that will hit consumers making it tougher to qualify:

Raising the minimum FICO score you need to qualify.
Increasing the cost of FHA mortgage insurance and possibly changing how premiums are collected.
Increasing the FHA down payment required for an FHA loan.
Decreasing the amount that sellers can pay toward a buyer’s FHA closing costs.

Why the FHA mortgage insurance exists

The FHA agency was created during the Depression to put builders and contractors back to work, keep the mortgage industry going and help keep homeownership affordable.

FHA mortgage insurance doesn’t make loans; it insures them. Anytime a mortgage applicants has a down payment smaller than 20%, lenders require mortgage insurance. FHA’s mortgage insurance is low-cost, and the agency will insure borrowers that private industry often won’t touch. Essentially, FHA mortgage insurance lets borrowers — especially first-time homebuyers — get homes with low down payments.

Other FHA Mortgage loan Advantages Include:

Minimal Down Payment and Closing Costs.

Down payment less than 3.5% of Sales Price
Gift for down payment and closing costs allowed.
No reserves or required.
FHA regulated closing costs.
Seller can credit up to 6% of sales price towards buyers costs.

Easier Credit Qualifying Guidelines such as:

Minimum FICO credit score of 540.
FHA will allow a home purchase 2 years after a Bankruptcy.
FHA will allow a home purchase 3 years after a Foreclosure.

Easier Debt Ratio & Job Requirement Guidelines such as:

Higher Debt Ratio’s than other home loan programs.
Less than two years on the job is allowed.
Self-Employed individuals o.k.

http://www.fhamortgagefhaloan.com/

The history of the FHA mortgage

When mortgages became hard to get a couple of years ago, the FHA “helped when no one else would, when everyone else buried their head in the sand”It’s fair to say the very survival of the housing sector in 2007-08 is thanks to FHA.”

As the housing bubble expanded, FHA mortgage loans took a back seat to cheap, quick, subprime loans, dropping to about 4% of market share in 2005 through 2007 for new mortgages and refinances combined. But once subprime products disappeared in the housing collapse, the FHA mortgage market share grew, to 21% in September 2009.

Here are the changes being discussed and what they could mean to FHA mortgage applicants:

1. FHA Mortgage insurance premiums

FHA Mortgage applicants pay two kinds of premiums for FHA mortgage insurance: an upfront lump sum that’s due when the loan closes (currently 1.75% and usually rolled into the loan amount and financed) and monthly payments (0.5% or 0.55% of the loan amount, depending on your down payment).

Here’s what you’d pay now in FHA mortgage insurance premiums on a $250,000 loan:

$4,375 (1.75%) at closing.
$1,250 to $1,375 (0.5 % or 0.55%) a year, broken into monthly installments.

An increase appears certain on at least the monthly charges, based on recent remarks to Congress by Housing and Urban Development Secretary Shaun Donovan.

There’s also speculation, says Lenders One’s Stern, that the FHA might require the upfront fee to be paid in cash and close off the option of rolling it into the loan.

Stern says that financing option is “one of the primary benefits of FHA.”

The cost to you: Higher mortgage insurance premiums will increase your monthly payments. And if you’re not allowed to finance the upfront insurance premium, you’ll have to produce the entire amount in cash at closing. (Your monthly payments would drop a bit, though, if you couldn’t roll the lump sum into your loan.)

2. FHA Down payment

Another big attraction of FHA loans is the low down payment requirement. You can get into an FHA-insured mortgage with as little as 3.5% down — that’s $8,750 on a $250,000 home.

That’s likely to increase, too. The idea would be to raise a borrower’s stake in the investment, reducing the chances you’d default.

The cost to you: Some in Congress want to raise the minimum down payment on an FHA-backed loan to 5% of the purchase price. That means you’d have to come up with $12,500 to buy a $250,000 home — $3,750 more cash than today. (Read “The end of the 0% down payment” and “How to come up with a down payment” to learn how down payments work.)

3. FHA LOW FICO Scores

During the housing boom you could get an FHA loan with a FICO score below 500. The government has been steadily raising the limit since mortgage lending has contracted.

Today, you need a minimum 600 FICO score to qualify for an FHA-backed loan. (Get a free credit score estimate here.) For many borrowers, that’s not really an issue, because their lenders require even higher scores. But a few lenders resell their loans directly to the FHA, not to loan aggregators or other banks. These lenders, for a price, will lend to borrowers with the FHA minimum FICO score, which means that today it’s still possible to get an FHA-insured loan with a FICO score of 600. That’s about to end.

Donovan told Congress that the administration intends to raise the minimum FHA requirement “for the time being” to weed out risky borrowers. He didn’t say by how much. Speculation ranges from 620 to 640. It’s possible that the new requirements will be multilayered, letting borrowers balance a lower credit score with, say, a bigger down payment.

“Of all these things, that will have the biggest impact, because there are so many borrowers who fall below the 620 score,” says Dale Vermillion, author of “Navigating the Mortgage Maze: The Simple Truth About Financing Your Home.” “Today, a lot of people have had credit issues, and their credit scores have gone down. When you combine the two (insurance and down-payment increases), it’s certainly going to have an impact on purchases.” (If your credit score is low, see “Raise your credit score to 740.”)

Raising FHA’s minimum score changes the playing field, says Stern. While private lenders usually do require higher credit scores, they can drop their limits quickly when lending safety has improved. A higher minimum FHA requirement means lost flexibility for retail lenders and their homebuying customers.

The cost to you: Buyers with FICO scores under the new minimum, be it 620 or 640, will be shut out of loans. The rules probably will become more rigid than they are today.

4. HomeSeller contributions to closing costs

Sellers sometimes agree to help pay a buyer’s closing costs. It’s a way to help a cash-poor buyer make a purchase. Currently, the FHA lets sellers contribute as much as 6% of the house price. The administration is considering reducing that to 3%.

“Three percent is what conventional loans allow, industrywide,” says Chad Bergman, a mortgage banker with Frost Mortgage in Littleton, Colo.

The history of the FHA

The cost to you: Probably nothing. In practice, a reduction to 3% probably won’t matter to most FHA buyers, at least today, Bergman says. Closing costs are based in part on loan amounts and interest rates, and they were considerably higher several years ago, when home prices and interest rates were higher. Today, closing costs average just $2,732 nationally on a $200,000 loan (they vary from state to state), according to a study by Bankrate.com.

If you were buying a home for $210,000, borrowing $200,000 and your closing costs were $4,000, currently the seller could pay up to $12,600 (6% of the home’s price) toward your closing costs — more than enough to cover the whole bill. If the seller’s allowed “concession,” as it’s called, dropped to 3%, your seller could pitch in up to $6,300 — still plenty.

‘Still the best mortgage for Florida homebuyers out there’

Taken together, the upcoming changes will make buying a Florida home harder for individual consumers, no question about it. And the FHA administration says it intends to back out of its expanded role once FHA mortgage lenders start making more loans again.

But, FHA still has the lowest down payment in the industry, still has unbelievably low interest rates and still is doing fixed-rate 30-year amortization mortgages. It’s still the best mortgage loan out there.

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Article Source:http://www.articlesbase.com/mortgage-articles/fha-loan-offers-florida-homebuyers-a-low-cost-way-to-own-a-florida-home-1721965.html

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Accurate Mortgage Information Tells You a Great Deal

January 13th, 2010

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Let’s say that you are considering moving into Burlington, Wisconsin but are not really too sure that you want to move there. How do you go about finding out what the real status is of the Burlington Mortgage scene? Well, you could do several things that will answer this question, the least of which is to ask a Burlington Mortgage lender to show you information that shows you the real picture in terms of the numbers and types of mortgage loans approved as well as the average loan amounts and the breakdown of all this information into graphs or charts that are easy to understand.

Something else that you can do in order to find out the real deal on and about the Burlington Mortgage industry is to go online and search specifically for this type of information. When you are able to really take the time and sit down to read through all of the pertinent Burlington Mortgage information that is presented to you, you begin to get a pretty good idea about the area in terms of the financial side of the deal and will also be able to decide whether or not you want to move there.

The one thing that you are going to need to be aware of ahead of time when you want to look through this particular type of Burlington Mortgage information is that there is a great deal of information to look through. There are a lot of graphs and charts that show you in detail the entire economic picture of the area that you are looking into. What really helps you here is that the Burlington Mortgage information is very thorough and is broken down into separate categories and also pretty thoroughly explained and researched ahead of time.

The only downside here is that the Burlington Mortgage information that I found is from back in 2007. Now, you might not think too much of this because of the fact that 2007 was only 2 years ago; but there are people out there reading this that are going to want to see statistics from 2008 and also from this year – 2010- if at all possible in order to see how the trends are moving. Not that this idea is necessarily a bad one; but you might not be able to get access to that kind of information unless you actually do work for a mortgage lender or are dealing with the banking/lending side of this equation somehow. You know something folks; you can’t always judge a book by its cover.

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Article Source:http://www.articlesbase.com/mortgage-articles/accurate-mortgage-information-tells-you-a-great-deal-1712102.html

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Mortgage Rates Dip in Advance of Forecasted Rises in 2010

January 11th, 2010

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While the mortgage industry is definitely expecting a rise in interest rates in upcoming months, the first week of the year has actually seen a slight dip in rates as we enter the new decade. The mortgage rates for 30 year mortgages have actually managed to drop slightly from around 5.14% to 5.09% for the first dip in a steady climb over the previous five weeks after hitting an epic low of 4.71% at the beginning of December.

Most experts in the field of economics have been expecting a slow and steady rise in mortgage rates, due, in part, to the nearing the deadline for the Federal Reserve support for keeping the mortgage rates lowered artificially by buying up mortgage-backed securities at the end of March. To let the mortgage sector recover now, the industry needs to be weaned off Federal support and allowed to recover on its own. The Federal Reserve purchased over a trillion dollars worth of mortgage-backed securities to regulate the interest rates and try to encourage people across the nation to become home buyers.

Expert economists seem to agree that the interest rate on 30 year mortgages will likely rise by about 0.75% by mid-year 2010 and will continue the remainder of the year though the rising rates aren’t expected to change much until the Federal Reserve program expires in March.

Although mortgage rates aren’t expected to rise to the previous levels that we had seen in 2006—at least not this year—it is still recommended that anyone considering a home purchase not linger too long over the stock on the market if they’re looking for the best deal on interest. While a 1% change in the mortgage interest rate is not likely to price you right out of a certain home, it will make a difference to your monthly mortgage payments.

All in all, with the upcoming changes in real estate—with the ending of the Federal Reserve program to keep interest rates low, the government’s tax credit for home buyers, and the Making Home Affordable refinance program—it is a good idea for home buyers and home owners needed to refinance to get on the bandwagon and get their ducks all in a row before these programs expire and they’re left out in the cold. It is expected that the market may just not be as full of good deals once these programs have all expired.

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Article Source:http://www.articlesbase.com/mortgage-articles/mortgage-rates-dip-in-advance-of-forecasted-rises-in-2010-1702398.html

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The US Mortgage Industry Changes Constantly to Keep Pace

January 8th, 2010

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Are you someone that lives in the USA and are trying to keep up with the changes to and activity that seems to be non-stop within the US Mortgage industry are not going to have that easy a time trying to keep up with the constant changes that have a habit of becoming the defining standards throughout the state. Heck, there is actually no easy way to really keep up with the constant changes that are going on in the US Mortgage industry; yet most of the Realtors and Real Estate agents really do need to be able to keep up with all the changes going on.

When you really think about it there have been and are going to be so blessed many changes taking place throughout the US Mortgage scene as well as all over the country because the mortgage business is totally linked into the Real Estate business and always will be. You actually cannot separate one from the other when it comes to getting the job done due to the fact that you need the mortgage business there so that home buyers can actually buy the homes that are looking at.

When it comes to helping US Mortgage and Real Estate professionals keep up with everything involved in their business there is no better place to turn for all the information that you need than something like the US Mortgage Bankers Association. These groups are there for the specific purpose of being able to keep everyone that is a member with them and also turns to them updated on the latest information about and related to the mortgage industry. They also keep everyone up-to-date about the goings on in the mortgage, Real Estate and banking/financial industries.

When you are a part of the US Mortgage industry you are not going to have to walk alone at all; nor can you afford to even think about trying to make your way through the sometimes confusing maze of changes that the global economic meltdown and crisis has brought about. This is the reason why many US Mortgage professionals need to have trade associations in place and be part of them now more than ever before. If you are in the mortgage business in any way, shape or form you are going to need to know exactly what is going on in the industry and how to keep pace with the ever-changing rules of play here. It is this reason that groups like the US Mortgage Bankers Association are around in the first place. These groups are designed to keep all their members “in the know” as far as what’s what in the mortgage business so that mortgage bankers all over US will be able to keep up with the ever-evolving mortgage business.

Article Source:http://www.articlesbase.com/mortgage-articles/the-us-mortgage-industry-changes-constantly-to-keep-pace-1680604.html

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How Obamas Stimulus Helps Homeowners Refinance a Mortgage

FHA loan offers Florida homebuyers a low cost way to own a Florida home

Self-Employed individuals o.k.

http://www.fhamortgagefhaloan.com/

Accurate Mortgage Information Tells You a Great Deal

Mortgage Rates Dip in Advance of Forecasted Rises in 2010

The US Mortgage Industry Changes Constantly to Keep Pace

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How Obamas Stimulus Helps Homeowners Refinance a Mortgage

FHA loan offers Florida homebuyers a low cost way to own a Florida home

Self-Employed individuals o.k.

http://www.fhamortgagefhaloan.com/

Accurate Mortgage Information Tells You a Great Deal

Mortgage Rates Dip in Advance of Forecasted Rises in 2010

The US Mortgage Industry Changes Constantly to Keep Pace

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