Banging On My FHA Drum Again
There have been a couple of changes recently in the lending arena,
Fannie Mae and
Freddie Mac have added a new risk assessment fee and they are adding "delivery fees"
First let's look at the risk assessment fee for those buying with a higher than a 70% loan to value ratio.
Credit scores will determine the amount of the rate adjustment.
- Credit scores between 660-679: 0.750% of loan size in fees
- Credit scores between 640-659: 1.250% of loan size in fees
- Credit scores between 620-639: 1.750% of loan size in fees
- Credit scores below 620: 2.000% of loan size in fees
This can have an impact on home prices, because when qualifying for a loan, the borrower is based on a monthly debt to income ratio. The same amount of monthly income is now able to borrow less money.
I like this solution so far, it doesn't affect people that have good credit or a large downpayment. Let's face it, if you have a less than favorable credit history and no down payment, you are a higher risk.
Now let's look at the other fee.
Fannie Mae
Fannie Mae's new fee is called an "Adverse Market Delivery Charge"
Freddie Mac
Freddie Mac's new fee is called "New Market Condition Postsettlement Delivery Fee"
They both are charging an additional .25% fee at closing. Although it is not a huge cost, this one appears to be across the board. The other fees are based on credit score which is the best way to determine the risk. This one is a little unfair, because it lumps everyone together.
FHA Loan and Limits In Salt Lake
Now with all that said, they DO NOT apply to FHA or VA Loans that are insured or guaranteed by the Federal Government. Although FHA an VA have always had a upfront fee
FHA Does Not Use FICO Score, VA has it's own set of rules that are pretty similar to FHA.
Hmmm, I wonder which loan program is going to be become very popular in the next couple of years. So I am going to bang on my FHA Drum again. I know FHA only goes up to $362,790 in loan amount. That is approximately 83% of all the homes sold in Salt Lake County this year.
8 Reasons To Use An FHA Approved Lender
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