FHA Lending Sign Of Weak Housing Market?

May 26, 2010 by Leave a Comment

FHA has money to lend, and boy is it flying out the doors! David Stevens, the agency’s head is quoted in Bloomburg as saying, “FHA lending last quarter may have topped the combined volume of government-supported Fannie Mae and Freddie Mac in a home-lending market that’s still a government-financed market.”

Is that GOOD news?  Well, apparently not.  Mr. Stevens told the Mortgage Bankers Conference the week before that:

“This is a market purely on life support, sustained by the federal government,”

“Having FHA do this much volume is a sign of a very sick system.”

I like David Stevens. He’s a true Mortgage Banker, and he has been open and “transparent.”  But I’m wondering if he’s not perpetuating some of conversation on the Hill about needing more Mortgage Insurance (Guarantee Fee) for USDA Home Loans!

We do not need to be causing these huge alarms right now Dave!  Shhhhh!

The April Housing numbers were released today – and they were the best in 2 years… but the tax credit ended in April, and most anybody who knows anything about anything believes that’s why April was so good!

If you are looking for a mortgage lender in NC – please call Steve and Eleanor Thorne, Mortgage Banker in Cary 919-649-5058

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FHA Streamline Refinance When You Do Not Occupy Property

May 25, 2010 by Leave a Comment

FHA allows you to Streamline Refinance when you do not occupy property.  This was actually news to me, because we always tell folks that FHA is ONLY for use as a Primary Residence!

So we have a borrower who owned a home in Ohio (financed via FHA), moved to NC – but could not sell the home in Ohio. They purchased a home in NC while renting the other one out.

The rate on their home in Ohio is 6.25% – which is a good rate… except that FHA rates have DROPPED so much right now, they wanted to see if they could get a little better position!

Turns out we can save them $275 a month, AND keep it a FHA Loan! Yeah!

Here’s the deal – must be a Streamline Refinance, meaning:

  • no appraisal
  • no increase in the base loan amount
  • must pay the closing costs out of pocket
  • the lender CAN par price the loan to pay some of the costs
  • can NOT remove a co-signor

This is seriously good news if you have what is now Investment Property that has a FHA loan on it!  If you want to see if we can help you lower your payments with a refinance, call Steve and Eleanor Thorne, Mortgage Banker in Cary 919-649-5058

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USDA Home Loans have PMI?

August 24, 2009 by 1 Comment

USDA loans are the coolest loans on the planet right now, and most people don’t understand that it has a form of mortgage insurance…

Mortgage Insurance does not pay your mortgage off when you die (well, maybe there’s a kind that does, but that’s not what I’m talking about).  The PMI-type mortgage insurance is default insurance. It covers a small portion to the bank if you default on the loan.

With Conventional loans, it’s referred to as Private Mortgage Insurance, or PMI.  This insurance generally cost @ .58%of the loan amount on a monthly basis (assuming you have 10% to put down and really good credit scores).

FHA has Mortgage Insurance Premium, or MIP, which is 2.25% of the loan amount PLUS a monthly amount of .90% of the loan amount (think it’s kinda’ expensive?).

VA has a Guarantee Fee. So if you are Veteran using your VA benefits the fee could be as much as 3%! (For details click here).

USDA Home Loans also have a form of default insurance (PMI), and it’s a Guarantee Fee. The actual dollar amount is a rather complicated formula, and it ends up being about 3.5% – but most people use 3.5% as a rule of thumb for prequalifying purposes. (updated 5.27.2010 from 2% which is what they charged earlier)  USDA Home Loans are AFFORDABLE!

Note that starting October 1, 2011 USDA Home Loan will change it’s PMI calculations.  Starting in October – there will be a 1% upfront fee and a MONTHLY CHARGE!

If you want more information about  USDA Home Loans in NC - please call Steve and Eleanor Thorne, 919-649-5058.  We are Mortgage Lenders in the Triangle that specialize in these types of mortgage loans.  Ask us about your Tax Credit! We have the lowest rates!

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