Are you searching for FHA Mortgage Limits in your area? If so, this tool will help you do it.

Just type in your state or county of the area that you want to search and you'll be able to see what the FHA limits are in that area.

The Federal Housing Administration (FHA) sets limits on FHA mortgage loan amounts that HUD will insure. Limits are set for both FHA-insured traditional forward loans and FHA-insured Home Equity Conversion Mortgage (HECM) reverse loans. Limits set by Fannie Mae/Freddie Mac conventional loans are also available.

To access the link click here https://entp.hud.gov/idapp/html/hicostlook.cfm it will look like this, below.

If you have any questions on how to use the tool or drop down menus, please email me at Tino.Muratore@gmail.com.

Thanks and have a great day!

Here is a nice link for you to search to see if the condo or townhome that you are looking to purchase is on the approved FHA condo list. Just click here https://entp.hud.gov/idapp/html/condlook.cfm.

The link allows you to search FHA approved units by name, location, or status. What does it mean if your condo or townhome is not found on the list? Well, it probably means that you won't be able to secure FHA financing on that particular unit. There may be an exception or two.....

The guidelines are very strict concerning what is approved and what is not. Below is a short list of items that must be met in order to be approved.

1. Condominium or townhome is complete with no ongoing or anticipated addition of any units or common areas
2. Unit owners have had control of the common area for at least one year
3. The condominium association has proof of hazard, liability and flood insurance coverage
4. Unit is owned fee simple
5. There are no restrictive covenants or provisions restricting conveyance of the unit
6. A minimum of 90% of the units in the project have been sold 51% or greater of the units in the project are owner occupied
7. No single entity owns more than 10% of the units in a project with more than 30 units
8. No single entity owns more than 20% of the units in a project with less than 30 units

Please email me if you have any questions on how to use this tool or any other mortgage related questions. You can email me at Tino.Muratore@gmail.com.

Have a great day!

FHA is updating the appraisal requirements for declining markets.  A declining market is considered to be any neighborhood, market area, or region that demonstrates a decline in prices or deterioration in other market conditions as evidenced by an oversupply of existing inventory or extended market conditions.

Here is a short list of the future changes.

1. Include an absorption rate analysis
2. Adjust pending sales to reflect contract sales price whenever possible or adjust pending sales to reflect list to sale price ratios
3. Adjust active listings to reflect the list to sales price ratios for the market
4. Need at least 2 comparable sales within 90 days of the appraisal date
5. Include original list price, any revised list price, and total days on the market
6. Provide an explanation for days on the market that do not approximate time frames
7. Provide know or reported sales concession on active and pending sales
8. Need a minimum of 2 active listings or pending sales in addition to the 3 closed comps
9. Need bracketed listings using both dwelling size and sales price when possible
10. Reconcile adjusted values of active listings or pending sales with the adjusted values of the settled sales provided
11. Insure that active listings and pending sales are market tested and have reasonable market exposure to avoid the use of over priced properties as comparables

These changes go into effect on April 1st 2009.

If you have any additional FHA, VA, or First time home buyer questions...please ask!  I can be reached at Tino.Muratore@gmail.com

Thank you.

I wanted to put together a short post for you First Time Home buyers out there.  I'm know that you have been bombarded with Stimulus Bills and Packages just like I have.  It can get real confusing trying to sort out the fact from fiction.  Fact-President Obama passed a first time home buyer credit which was included in the American Recovery and Reinvestment Act that was signed into action on February 17th 2009.

Fact-This is a tax credit unlike the previous 2008 plan which was more like a 15 year interest free loan that had to be paid back.  You do not pay this back.  This is your money.

Fact-The maximum amount of tax credit that you may receive is equal to 10% of the purchase price of your home not to exceed $8000.00 (which is the max).

Fact-A tax credit is a dollar for dollar benefit to you the tax payer, not a deduction that decreases your taxable income. (Please consult your accountant)

Fact-There are income limits in place.  A single home buyer with a modified adjusted gross income of $75,000.00 or less is eligible. 

Fact-Married couples with modified adjusted gross income of $150,000.00 or less are eligible.

Question?  What is modified adjusted gross income?  Modified adjusted gross income or (MAGI) as you will sometimes see it is your adjusted gross income (AGI), modified by various adjustments.  Which adjustments?  (Please consult your accountant)

Fact-The tax credit is retroactive to January 1, 2009 and runs through December 1st 2009. (Please consult your accountant)

Fact-It is true and if you already filed your 2008 tax return, which most of you probably have...you can amend your return and still receive the credit this year.  (Please consult your accountant)

Fact-This program is for what they define as First time Home Buyer.  What is the definition of a first time home buyer?  Good question.  A first time home buyer is defined as any tax payer who has not owned a primary principal residence within 3 years of your new home purchase.  What is a primary principal residence?  Another good question.  Your primary principle residence is where you live.  Not your Aunt, or your Cousin, where you sometimes may stay.  It's the primary location that you inhabit.

Fact-If you make more money than the above listed figures...you may still be eligible for a reduced credit. 

Fact-You or your accountant needs to fill out Form 5405 which will help you determine your tax credit.  Then you will be able to claim that amount on line 69 of your 1040 tax return.  (Please consult your accountant)

Fiction-You can not borrow against the credit to help you with your down payment on your home.  That would be nice!  There are several different programs that will help you do that.  Please read some of my older blog posts.  I have written about quite a few of those programs.  If you have any questions...please email me at Tino.Muratore@gmail.com.

Thank you. 

FHA cash out refinances have undergone a couple of recent modifications.  Here are a couple things that you should know about the changes.

1. Your existing loan must be current and not delinquent.
2. You cannot add non-owner occupants to help you qualify for a cash out refinance.
3. You must have lived in your primary residence for 12 months to get the max cash out of 85% LTV (loan to value).
4. If you have lived in your primary residence for less than 12 months, your new loan amount will be capped at 85% of the sales price or appraised value (whichever is less).
5. You will need a 2nd appraisal for all cash out refinances above $417,000.00.
6. If you plan on adding a new simultaneous 2nd mortgage, you will be capped at a max of 85% CLTV (Combined loan to value).
7. If you have an existing 2nd mortgage and are planning on re-subordinating it, you can re-subordinate it with no max CLTV.
8. If you currently have a 2nd mortgage and you modify it to accomodate your new 1st mortgage, you will not have a CLTV restriction.

These changes are temporary and in effect as of April 1st 2009.  Please email me if you have any questions, Tino.Muratore@gmail.com. 

Thank you,

Tino

I often get asked often if APRs (Annual Percentage Rate) are a good way to determine lenders rates and fees?

My answer is no, it's not.  While you can use the APR as a guideline to help you shop for your loan, you should not solely depend on it.  What you should be looking at is total fees, possible rate adjustments in the future if you're holding an ARM (which stands for adjustable rate mortgage), and you should also be considering the length of time that you plan on staying in your home. 

The Federal Truth in Lending Law requires that all financial institutions disclose the APR when they advertise a rate.  This is why you see it everywhere.  The APR is designed to show you the actual cost of obtaining your financing.  The problem is, that it includes some, but not all of your closing cost fees in it's calculation.  These fees in addition to the interest rate determine your estimated cost of financing over the full term of the loan.  It may be misleading to spread the effect of some of these up front costs over the life of the loan. 

Also, the APR does not include all of the closing fees that you are likely to pay.  Lenders are allowed to interpret which fees they may include in their APR calculation.  Certain fees like appraisals, title work, and other document preparation fees are usually not included, even though you'll have to pay them.

Remember, that the APR is an "effective" interest rate and not the actual interest rate that your monthly mortgage payments will be based off of.

Good luck and happy mortgaging:)  If you have any mortgage related questions, please email me.

Thank you.

Hello everyone...

I get asked all the time to explain the difference between getting pre-qualifyed or pre-approved.  So, let me try to explain a couple of the most confused words in the mortgage vocabulary.

When you hear someone speak of getting pre-qualified, that usually means that they have spoken to a loan officer and he/she has determined the dollar value of a loan that you could be approved for based on your implied income, credit score and other miscellaneous financials.  A pre-qualification is not a commitment to lend, but an educated guestimate based on the information that you provided to your loan officer.

A pre-approval on the other hand usually involves taking a full mortgage application (1003), pulling a credit report, getting your employment history, financial information (assets) and (liabilities), monthly gross income, monthly housing expenses, etc...and entering that data into a computer program that does the automated underwriting.  If your particular loan scenario comes back as eligible, then you will be issued a pre-approval letter stating the amount of loan that you are pre-approved for.  Usually a pre-approval is subject to a few conditions that need to be addressed prior to closing.  Getting a pre-approval letter may help you negotiate a better price for the home that you are trying to purchase.  It tells the seller that you are a qualified buyer and your offer should be taken seriously.

Well, simple enough, huh?  If you have any mortgage related questions....please email me.

Thanks.

CAHMCO which stands for Corporation for Affordable Homes of McHenry County is a first time home-buyer program for residents in McHenry County Illinois.  CAHMCO assists potential first time buyers with down payment and closing costs funds. This is one of the biggest obstacles preventing home-buyers from ever buying their first home.

The assistance is provided as a 0% loan, which is forgivable after five years.  So, if you live in your home for the full five years, you do not have to pay the loan back.  If you do not live in the home for five years, the repayment of the loan is calculated at 1/60th of each month that has not been forgiven.

• Example; if your grant was for $5000.00 for your down payment and you sell your home after living in it for 30 months you would calculate it like this...
• $5000.00 (grant) divided by 60 months (5 years) = $83.33 a month
• $83.33 multiplied times 30 months = $2500.00 which is what you would have to pay back

I hope that example makes sense and I did not confuse you even more:)

There are also income limitations associated with the program which is calculated by the size of your household and your gross income.  All homes cannot exceed $190,000 in sales price and must be located in McHenry County Illinois.

If you are interested in finding out more about this unique first time home-buyer assistance program, or any other assistance program in Illinois, please email me.

Thank you!

FHA Streamline Refinances are a great way to reduce your current (FHA insured mortgage) interest rate without going through all of the paperwork needed to do a traditional refinance transaction.

FHA Steamline refinances are designed to lower your monthly principal and interest payments and must involve no cash back to the borrower, except for minor adjustments at closing not to exceed $250.00.

FHA Streamline refinances can be made with or without an appraisal. *

FHA Streamline refinances do not require a credit report or verification of employment. *

Lenders can use an abbreviated version of the Uniform Residential Loan Application (1003) that omits sections IV, V, VI, and a-k of VIII, provided all other required information is captured.  The lender must assure itself that is in compliance with Equal Credit Opportunity Act and all other regulations, the loan application does not need to be signed by the borrower (s) until closing.

We have been seeing a huge demand for this type of refinance transaction in today's market.

There is not another product on the market that will allow you to refinance your current mortgage without an appraisal or credit report.  This is huge!  The housing market today is not what it was a couple of years ago, hence you may still be able to refinance even though your true appraised value of your home went down, or even your credit score for that matter.

Please email if you would like to see if you qualify for a streamline refinance.  It's not going to cost you a thing, but could save you a small fortune!

FHA has permitted streamline refinances on insured mortgages since the early 1980's.  The "streamline" refers only to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction.

The basic requirements of a streamline refinance are:

• The mortgage to be refinanced must already by FHA insured.
• The mortgage to be refinanced should be current and not delinquent.
• The refinance is to result in a lowering of the borrower's monthly principal and interest payments.
• No cash may be taken out on mortgages refinanced using the streamline refinance process.

Lenders may offer the streamline refinances in several ways.  Some lenders offer "no cost" refinances (actually, no out of pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash.  From this premium, the lender pays any closing costs that are incurred on the transaction.

Lenders may offer streamline refinances and include the closing costs into the new mortgage amount.  This can only be done if there is sufficient equity in the property, as determined by an appraisal.  Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed the original loan amount.  Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal.

If you have an existing FHA home mortgage and you want to take advantage of a lower interest rate, this is the product for you!

Please email me, and I will assist you with your refinance transaction.