FHA

Found 7 blog entries about FHA.

FHA loan limits have increased! The FHA loan limits went from $304,500 to $312,800 in Salt Lake County. What dose this mean to buyers and sellers? If you buy in Salt Lake County with an FHA loan purchase price (typically putting down 3.5%) this makes your â€‹purchase power increase from last year approximately $8,000.

Something for Sellers to keep in mind: if you list your home for $325,000-$440,000 you are only making your home available to buyers that are able to put 5% down (this price range is above the 3.5% down FHA limit). However;  if you list at $325,000 you then add a plethora of buyers to your purchasing pool by including 5% down buyers AND 3.5% down buyers. This makes your home an option for many more buyers and your ability to sell that

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Waiting?

Everyone asks me “When is the best time to buy a home?” The answer: Before April 1st!

Waiting until after April 1st will cost you money. Big money! In fact, waiting until after April 1st could cost you at least 6% of your home purchase. That means you’ll be paying a lot more for your house!

Here are 3 reasons why you should buy before April 1st.

1.) Supply and Demand! The last time we saw our current levels of supply and demand was 2005. Do you remember what happened last time? Prices skyrocketed. Here is our situation: the supply of homes is less than 50% what it was a year and a half ago. If you've been looking at the homes for sale you've noticed that many are short sales that already have multiple offers. This means you will

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Friday before a 3-day weekend. The perfect time to announce bad news.  

Fannie Mae and Feddie Mac are going to raise guarantee fees, which they charge to lenders, an average of 10 basis points. To give you some persepctive, basis points for lenders averaged 26 points in 2010, and 28 in 2011. The 10 point increase represents more than a 25% jump in guarantee fees. This large increase WILL affect your mortage rate.

 

Do you remember the 1992 film "Newsies"? It tells the story of a group of paperboys who went on strike because the newspapers were charging them more to deliver their papers. This point increase is similar; the lenders are being charged more fees for FHA loans. The difference is you definitely will not be singing

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Congress has proposed new limits on FHA loans. How will this affect people in Utah? It will reduce your purchasing power is some price ranges. If you want to purchase a home in Salt Lake county close to $600,000, or if you are intending to purchase a home in Utah county anywhere above $270,000, you may not be able to get FHA financing. Anyone who wants to purchase a home above the FHA limit will have to get a conventional loan for that house. Conventional loans have more strict requirements, and may have a higher rate. One thing for sure, you WILL be required to make a larger down payment for a conventional loan.

If you, or anyone you know, will be purchasing a home near the proposed limit you need to close soon. If passed, these limits will go into

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The Obama administration is reducing the government's role in mortgages. They have made a proposal that will undo 70 years of previous federal policy aimed at getting Americans to buy homes. This proposal may also increase the expense of home loans all across the board.

The plan, rolled out by the Treasury Department on Friday, will slowly dissolve Fannie Mae and Freddie Mac. These two programs are government-sponsored and purchased mortgages during the 2008 housing slump to encourage more lending. Eventually these purchases had to be bailed out.

"It's clear the administration wants the private sector to take a more prominent role in the mortgage rates, and in order for that to happen, mortgage rates have to go up," said Thomas Lawler, a housing

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FHA's reserves are high, their defaults are low, and the average borrower's credit score is 720. So why did FHA recently change premiums? Because of an upcoming audit. They are worried about how the audit is going to turn out.

If the audit turns out good:

  1. They can show that government involvement in loans has been a good thing.
  2. They can show that the private sector's loans of no docs and stated income is what caused the market to go down.

FHA is striving to show that low down full docs are safe. They want to show the private market how to reduce risk and still give more loans.

Their current worry is lenders making their own rules! Lenders have been setting their own guidelines because they are afraid they may be required to buy back bad

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A few months ago I reported on some possible changes coming from Washington D.C. The wait is over and Change is approved!

The Senate has approved changes in FHA financing that will reduce the upfront costs of an FHA loan, but increase the monthly payment for mortgage insurance. The official statement points at 'perilously low' reserves as their reasoning for making the change.

The changes will go into effect October 4th, 2010.

Here is how it is right now:

If you were to get a $200,000 FHA Mortgage...
The upfront Mortgage Insurance Premium would be $4,500 (2.25% of the loan amount)
Monthly premiums would be $92 per month or $1,100 for the first year (.55% the loan amount)

Here are the new terms on a $200,000 FHA mortgage...

The upfront

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