fha: House-Hacking your way to multi-unit rentals
- 03/12/24 07:01 PM
House-hacking refers to buying a multifamily property on an owner-occupied mortgage, living in one unit and renting the others. If you're thinking about becoming a rental mogul, starting early is an advantage. Not only will you have longer to accumulate a larger portfolio, but you can also increase the leverage on the first owner-occupied acquisitions.
Leverage is the use of other people's money to finance an investment. The higher the loan-to-value, the greater the leverage which can increase the yield. The lower down payment gives the investor more leverage which can increase the return on their investment.
FHA, VA, Fannie Mae, and Freddie Mac … (1 comments)
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fha: Helping the Seller See Your FHA/VA Offer More Favorably
- 05/29/22 12:25 PM
Helping the Seller See Your FHA/VA Offer More Favorably6/1/2022 With multiple offers the norm on many listings these days, the seller relies on their listing agent to help them determine which one to accept. In some cases, offers subject to FHA or VA mortgages tend to move to the bottom of the list.
Some sellers consider all cash offers first and then, conventional offers with at least 20% down payments as the next most likely to close. It may be because of a common misconception that FHA or VA buyers are poor credit risks and have a higher likelihood of not being approved. Both … (3 comments)
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fha: Where Did the Assumptions Go?
- 12/16/20 10:08 AM
Mortgage assumptions have not been a practical matter for the last 30 years because mortgage rates have been on a steady decline. Even if the seller had a rate lower than the current rate, the new purchaser must qualify to assume the loan.
In the case of conventional loans, the lender has the right to increase the rate to the current rate which neutralizes the reason for assuming the loan. This change took place in the early 1980's when lenders added due on sale provisions so lower rates could not be assumed.
FHA and VA loans can be assumed at the existing … (1 comments)
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fha: Show Them You Are Serious
- 06/17/19 06:35 PM
Show Them You're Serious6/19/2019 June and July are the busiest home sale months of the year. When inventory is in short supply and you may be competing with other offers, it is important to show the seller you're serious. Make your offer look as good as possible because you may not get the chance to make or accept a counter-offer.
Put yourself in the seller's shoes. Your home has just gone on the market. There is lots of activity and suddenly, there is more than one offer to purchase. The seller's first consideration may be to accept the highest offer but there are many other … (2 comments)
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fha: Eliminate FHA Mortgage Insurance
- 01/08/19 07:51 PM
Eliminate FHA Mortgage Insurance Mortgage insurance premium can add almost $200 to the payment on a $265,000 FHA mortgage. The decision to get an FHA loan may have been the lower down payment requirement or the lower credit score levels, but now that you have the loan, is it possible to eliminate it?
Mortgage Insurance Premium protects lenders in case of a borrower's default and is required on FHA loans. The Up-Front MIP is currently 1.75% of the base loan amount and paid at the time of closing. Annual MIP for loans with greater than 95% loan-to-value is .85% per year.
For loans with … (0 comments)
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fha: Waiting Will Cost More
- 04/17/18 06:16 PM
With the first quarter of 2018 in the books, the 30-year fixed rate mortgage is nearing what Freddie Mac predicted it would be in the second quarter. If this pace continues, rates will exceed the five percent mark expected by the end of the year.
The Fed has had its first of an expected three raises for this year and two more are expected in 2019. While these rates are not directly related to mortgages, they certainly have an effect.
Delaying the decision to purchase or refinance could be an expensive missed opportunity. A $270,000 mortgage at 4.44% has a principal and interest … (1 comments)
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fha: FHA Advantages
- 03/31/18 08:24 PM
FHA Advantages
The Federal Housing Administration, operating under HUD, offers affordable mortgages for tens of thousands of buyers who may not qualify for other types of programs. They are popular with both first-time and repeat buyers.
The 3.5% down payment is an attractive feature but there are other advantages:
More tolerant for credit challenges than conventional mortgages. Lower down payments than most conventional loans. Broader qualifying ratios - total house payment with MIP can be up to 31% of borrower's monthly gross income and total house payment with all recurring debt can be up to 43%. There is a stretch provision taking it … (1 comments)
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fha: Assumptions are an Alternative
- 07/19/17 05:22 PM
Assumptions are an Alternative
In the late 80’s, both FHA and VA began requiring buyers to qualify to assume their mortgages. The main reason there haven’t been many assumptions in the past 25 years is that interest rates have been steadily going down and if a person has to qualify, they might as well do it on a new loan and get a lower interest rate.
Based on projections by Fannie Mae, Freddie Mac, the MBA and NAR, rates for the second half of 2017 and 2018 are expected to be higher. When interest rates on new mortgages are higher than the rates … (1 comments)
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fha: Good Info - Good Decisions
- 05/22/17 05:53 PM
While low inventory is certainly challenging buyers, not having a clear understanding of mortgage financing is also causing issues. By having good information, they are able to make better decisions as well as compete favorably.
Most buyers don’t realize how the mortgage rate is determined for a borrower. While annual income is important, a good credit score, low debt-to-income ratio, loan-to-value ratio and ability to repay the loan are vital concerns.
A variety of myths seem to permeate the market such as rates are set and released once a day; FHA loans are for first-time buyers only; pre-qualification commits the lender; lender fees … (5 comments)
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fha: Wait a Year...It Won't Matter?,
- 08/12/15 11:09 AM
There is a frequently quoted expression “more money has been lost from indecision than was ever lost from making a bad decision.” Regardless of the extent of its accuracy, most people can recall when procrastination has cost them money.
There are markets so short of inventory that buyers have become frustrated after losing bids for several homes and have decided to wait until more homes come on the market. In the meantime, the shortage of homes is driving the prices up more by the month.
There are buyers who can’t find what they want for the price they want to pay and think … (3 comments)
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fha: FHA or Conventional?
- 04/08/15 09:03 AM
FHA or Conventional? - 3/23/2015 Buyers with a minimum down payment are generally faced with the decision of whether to get a FHA or a conventional loan. With the new 3% down payment program on conventional loans, it may become more confusing which loan to pursue.
The two loan programs have mortgage fees that can differ greatly. FHA has a 1.75% up-front mortgage insurance charge in addition to the monthly mortgage insurance charge which was recently lowered by .5%.
FHA’s mortgage insurance is a fixed amount where conventional mortgage insurance providers’ fees are determined by individual companies and according to the credit score … (1 comments)
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fha: Selecting a Local Lender
- 03/21/15 07:32 AM
Selecting a Lender
Finding a mortgage lender is not a problem. Selecting someone who will help you find the best loan product for your situation even if it means sending you to another lender is paramount.
There is a huge advantage to be able to sit across the table from someone you’re doing business with and look them straight in the eye. It’s difficult to make an informed decision based on a website and a phone call.
Doing business with a full-time professional who specializes in residential loans like you’re trying to get is important. You want the loan officer … (1 comments)
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fha: Money Down the Drain
- 09/10/14 12:13 PM
Money Down the Drain - Private mortgage insurance is necessary for buyers who don’t have or choose not to put 20% or more down payment when they purchase a home. It is required for high loan-to-value mortgages and it provides an opportunity for many people to get into a home who otherwise would not be able.
The problem is that it is expensive and a homeowner’s goal should be to eliminate it as soon as possible to lower their monthly payment and avoid putting good money down the drain.
FHA loans made after 6/1/13 that have 90% or higher loan-to-value at … (6 comments)
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fha: What Is A Reverse Mortgage?
- 08/17/14 03:33 AM
Reverse Mortgage - 8/11/2014
With all of the encouragement from celebrity spokespersons like Fred Thompson, Robert Wagner and Henry Winkler, there is a growing awareness of reverse mortgages. The fact is that our population is getting older and more than 25 million homeowners meet the age requirement.
A reverse mortgage will allow homeowners age 62 or older currently living in their home to tap into their equity. The amount available is determined by the borrower’s age, the home’s current value and current interest rates. The loan proceeds can be received in a single, lump-sum or periodic payments. The closing costs can be paid … (1 comments)
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fha: An Unexpected Expense
- 06/29/14 03:01 AM
An Unexpected Expense In a study released by TD Bank, 65% of buyers with mortgages that required mortgage insurance said the higher monthly payment was more than they originally expected.
Private mortgage insurance is required on loans that exceed 80% of the home’s value. For conventional loans, the premiums range from 0.5% to 1% annually. The PMI could add close to $100.00 a month to the payments on a $200,000 mortgage and over $200.00 a month on a FHA mortgage.
FHA has two components to its mortgage insurance which includes an up-front charge on closing of the loan and an annual charge. … (3 comments)
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fha: Rent vs Buy-costs are going up
- 02/10/14 09:47 AM
Rent or Buy - the cost is going up - Created on 2/9/2014 & modified on 2/10/2014
Whether you continue to rent or decide to buy a home, according to recent Zillow 2014 housing projections, the cost is going up. Zillow projects home prices to increase nationally by 3%, mortgages to rise to 5% interest rate by the end of the year and rents to go up by 2.5% on average.
If it will cost a person more whether they rent or buy, the conclusion can be made that one way or the other, they will pay for the house they occupy. The … (0 comments)
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fha: 13,918 Houses Sold Yesterday!
- 07/29/13 11:53 AM
13,918 Houses Sold Yesterday! - 7/29/2013
There are many naysayers declaring that the housing market is still challenged. Young adults are burdened with too much student debt. Interest rate increases are killing demand. Homeownership is no longer seen as part of the American Dream.
We just want to let these naysayers know three things: 13,918 houses sold yesterday, 13,918 will sell today and 13,918 will sell tomorrow. 13,918!
That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales had increased 15.2% over the … (2 comments)
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fha: Selling a House: What Does it Take?
- 07/21/13 11:44 AM
Selling a House: What Does it Take?
The most important need of anyone attempting to sell their house is – TO GET IT SOLD! It is imperative that you, the agent, are very direct in what it takes to get a house sold. Here is a checklist we put together.
ACCESS A seller should be willing to give almost unlimited access to potential purchasers if they are looking to sell. Any restrictions to showing the home will result in fewer buyers which could result in a lower price, a longer time on market or both.
CONDITION Condition goes a long way … (0 comments)
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fha: FHA to Cost Borrowers More - 12/3/2012
- 12/08/12 02:39 PM
FHA to Cost Borrowers More - 12/3/2012FHA has announced a major change to its loan program which allows borrowers to cancel the mortgage insurance premium (MIP) when their unpaid balance reaches 78% of the original purchase price. While no specific date has been set for the change, sometime in 2013, new FHA loans will require the mortgage insurance for the life of the loan.At existing rates, the monthly MIP on a $168,875 mortgage is $178.99 per month. Under the current rule with normal amortization, the MIP would no longer be required in 9 years and 9 months. However, under the new … (4 comments)
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House-hacking refers to buying a multifamily property on an owner-occupied mortgage, living in one unit and renting the others. If you're thinking about becoming a rental mogul, starting early is an advantage. Not only will you have longer to accumulate a larger portfolio, but you can also increase the leverage on the first owner-occupied acquisitions. 
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