- MONTHLY INSURANCE PREMIUM INCREASES FOR FHA HOME LOANS
Previously the monthly mortgage insurance premium was a factor of .55% of the loan amount (if the loan to value was over 95%). As of October 4, the factor has increased to .9% You are probably wondering how this affects the payment. On a $400,000 mortgage, using the old factor of .55% the monthly mortgage insurance would have been $183. Now Using the .9% monthly mortgage insurance factor we are looking at a monthly mortgage insurance payment of $300. This is an increase of $117 a month compared to the previous mortgage insurance for a $400,000 FHA mortgage. The great thing is even though the monthly mortgage insurance is higher the upfront insurance premium has decreased.
– FHA UPFRONT MORTGAGE INSURANCE PREMIUM DECREASED
The Upfront Mortgage Insurance Premium used to be 2.25%. But on October 4, 2010, they dropped it to only 1%. Using the same base loan amount as our previous example of $400,000 and using the old (UFMIP) of 2.25% $9,000 would have been added to the Idaho home buyers loan making the total loan amount $409,000. With the new upfront mortgage insurance premium of 1% we would have a total loan amount of $404,000.
– IDAHO FIRST TIME HOME BUYERS FHA IS STILL YOUR BEST OPTION
FHA mortgages are still the best option for first time home buyers looking to purchase in Idaho. While conventional fannie and freddie guidelines continue to be very tight FHA is still fairly flexible. FHA allows for lower fico (credit scores) as well as as little as 3.5% down payment. FHA also has more of a “makes sense” underwriting philosophy. Many Idaho home buyers are finding FHA to be the best choice even if they have quite a bit of money to put down.
If you have questions about an Idaho FHA mortgage whether you are purchasing or refinancing a home feel free to contact me.
Want to find out more about FHA mortgage insurance changes, then visit Michelle Guth’s site to learn more about Idaho FHA Mortgage Insurance Changes.
Rick & Jane May
ID MBL-2550 / NMLS # 173614/12870
There are many benefits to an Boise Idaho Short Sale versus a Boise Idaho Foreclosure, but there also many drawbacks to a short sale that need to be considered before deciding on the best course of action. A short sale is a great option for home owners who need to sell their home and owe more than their property is worth, but a short sale is not for everybody.
Benefits of a Short Sale
- A short sale will not drop the FICO score as much as a foreclosure. It is estimated a foreclosure will decrease a FICO score by as much as 250 points. The estimated decreased for a short sale is 150 points.
- The seller will be able to more quickly turn around and purchase another home after a short sale. Fannie Mae announced that effective July 1, 2010, short sellers can purchase a home with a Fannie Mae loan at 80% loan to value only two years after the short sale, and at 90% only four years after the short sale. With extenuating circumstances, Fannie Mae will allow a purchase at 90% loan to value only 2 years after the short sale. FHA requires a three year wait after a short sale, but will lender to 96.5% loan to value
- A short sale preserves some dignity for the seller. The seller will not have a “Notice of Trustee Sale” posted on their home while they still live in the neighborhood.
- Working out a short sale may allow the seller to avoid bankruptcy. It is important to work with someone with experience with short sales who knows how to negotiate with the lender (or lenders if there is subordinate debt as well) for Full Satisfaction of all debts.
Drawbacks of a Short Sale
- Short sales are not exactly “quick”, although this can vary depending on the lender or lenders being paid off. Waiting for the banks to respond can be a very frustrating process.
- There is no guaranty the bank will accept an offer. Last second maneuvers by the bank are not out of the norm. More frustration.
- The bank will want to see income and asset documentation from the seller to verify there is a true reason for the short sale. If the seller has significant assets, the bank may go after those assets or prevent the short sale from going through.
Figuring our whether a short sale is the best solution will take research. When a home owner finds themselves in a difficult situation, whether it be because of a job less, decrease in pay, or illness, combined with a drop in property value and even worse, an increase in mortgage payments, it is important to gather as much knowledge as possible. Talk to local real estate experts who offer guidance in how to deal with the many options. The home owner should consult with their trusted attorney, accountant, real estate agent, and loan officer. Consider all options carefully, but most importantly, don’t “do nothing”.
For more information regarding short sales and foreclosures feel free to contact me.
Rick & Jane May
ID MBL-2550 / NMLS # 173614/12870
Top 10 Boise Idaho Refinancing Mortgage Links/Articles/Questions
1. Making Home Affordable Program
2. FHA Streamline Refinance in Boise, Idaho
3. Idaho FHA Reverse Mortgage
4. Boise Idaho Home Mortgage Refinance Loan For Home Owners Facing Declining House Prices
5. Applying For A Boise Idaho Mortgage – Required Documents
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho
article is a syndicated column from Tim Storm