FHA is looking to end its down payment assistance program and eliminate 100% financing. It is about time! HUD states the foreclosure rate and resulting losses on these types of loans are 2-3 times greater than traditional FHA loans. These losses contributed to FHA's total loss of 4.6 billion dollars in 2007 and delinquency rates that were up 12.7%. The down payment assistance works like this. Let's say a buyer needs $7500 for a down payment. The seller can donate that sum plus an administrative fee to a nonprofit organization like the Nehemiah Corporation. Nehemiah Corporation then gifts the … (6 comments)
mortgage: 2008 THE YEAR OF FHA
- 12/27/07 12:57 AM
2008 THE YEAR OF FHA REASONS FHA WILL BE HUGE IN 2008REASON #1 : T0 AVOID HIGHER RATESYour clients can avoid the new Risk Based Pricing* now being charged for Conventional Loans .* The following Risk Based Pricing is now being charged on Conventional loan with less than 30% down: 1. Credit Score below 620 add 2 points or about 7/8% higher to the rate 2. Credit Score 620-639 add 1.75 points or about 3/4% to the rate3. Credit Score of 640-659 add 1.25 points or about 1/2 % to the rate 4. Credit Score of 660-670 add .75 to points or about 1/4% … (0 comments)
mortgage: Rates Freeze
- 12/03/07 03:32 AM
Friday, November 30, 2007 WHEN RATES FREEZE OVER Finally, there is some good news for the troubled mortgage market. The Wall Street Journal reported that the White House and the mortgage industry are close to a deal that would temporarily freeze interest rates for some sub-prime home loans on primary residences. Right now they are talking about a rate freeze for up to 7 years. The negotiations are on going.Deutsche Bank reported on Friday that Henry Paulson's plan would cover homeowners who are facing their first adjustable rate increase and have some equity in the property. This group would include 1.2 million … (1 comments)
mortgage: RENT VS. BUY
- 11/27/07 03:57 AM
WAITING ON A FRIEND I thought I would share this real life scenario.I have a friend that is planning to rent a home even though he is more than qualified to buy . However, he wants to "wait out the market" So, I started to think about the cost of rent, the tax write offs he would be missing, and the lost opportunity for equity growth, and thought, why wait? I entered his data into a rent versus buy calculator on Yahoo to see what the results would be. Here are the facts I entered: For Renting Rent is going to … (1 comments)
mortgage: Option ARMS
- 11/14/07 02:26 AM
Monday, November 12, 2007 Are Option Arms a Ticking Time Bomb?A CNN Money article refers to the Option Arm as "ticking time bombs". However, I believe for the right client, this loan makes sense. First let's explain how they work: Every month you get four payment options:1) The Payment Cap Rate- This is lowest payment. However, it does not even cover the interest accruing. So, the loan amount actually gets bigger instead smaller. This is called negative amortization.2)The Interest Only Payment- This covers all of the interest but none of the principle. If you make this payment every month, your loan balance … (1 comments)
mortgage: FHA Is Back!
- 11/12/07 02:23 AM
FHA IS BACK ! 5 Reasons to Consider FHA 1) As Little as 2 1/4% Downpayment 2) Credit Scores 600 or Below are Often Approved. 3) Coborrowers Income Can Be Used To Qualify (They don't have to live there) 4) Seller Can Pay All of the Closing Costs 5) Only Two Years Required After Bankruptcy
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