The FHA Commissioner cautioned against further increases of the down payment requirement at a subcommittee meeting earlier this month. There is already a list of proposed changes to the FHA loans, designed to shore up the agency’s cash reserves, but some were pushing for an increase of the minimum down payment from the current 3.5% to 5%. Rep. Scott Garrett (R-NJ) introduced a bill to raise this down payment last October. The bill would have to be sent to the floor and voted on before this increase would happen. Commissioner David H. Stevens stated that this would eliminate 300,000 new buyers... [more...]

Recently we discussed FHA changes (please review them here), but there are some important points to take away from the changes. (The changes include higher MIP up-front, higher credit score needed for a lower downpayment, a cap on seller concessions and more lender reinforcement.) First of all, the changes in upfront Mortage Insurance Premium to 2.25 percent will matter earliest. Our lender sources have informed us that this change is taking place April 5. The other changes follow this summer, according to the FHA. Translation: more money up-front. Basically, this means don’t wait. If you’re... [more...]

If you are buying or selling your house and bringing cash to the table, you may need to know the appropriate guidelines for using financial gifts. Many of us are fortunate enough to receive money from a parent or other relative in order to buy a house. But you can’t just deposit a huge check into your account and easily use it for a downpayment. Please read through these important guidelines, which come directly from our lender. Basically, you need a solid paper trail. If the gift funds are verified in the account before you apply for your loan and appear on your statement, you need to prove... [more...]

On Wednesday, a new set of policy changes were announced by the FHA. These are designed to decrease risk and continue to support the market while strengthening capital reserves. The reserves were dipping below a congressionally mandated level. We break down the FHA press release here: The FHA proposes to take the following steps: Increase the mortgage insurance premium. Update the combination of FICO scores and down payments for new borrowers. Reduce seller concessions from 6 to 3 percent. Implement a series of significant measures aimed at increasing lender enforcement. 1.) Mortgage insurance... [more...]

This is something that comes up a lot with my buying clients. “Why should I use the people you recommend?” I typically have two types of buyers. People who like having a recommendation from me and choose to use a lender, inspector or other contact I typically work with; and people who become skeptical and choose to find their own, often because they are convinced they might find a “better deal.” First, buyers must be aware: your agent does not receive any benefit from recommending a professional to you. It’s illegal, unethical, and will not happen, and if you’re... [more...]

We’ve mentioned before how the appraisal rules are have changed. (If you need to catch up, read this and this.) The highlights are as follows. - Lenders and third parties are not allowed to have any influential contact with appraisers. For instance, as your Realtor, I can’t call your appraiser and ask when the appraisal is going to be finished. -Borrowers must have access to a copy of the appraisal within in three days of the closing of the loan (although they may waive right.) -This means that buyers should not plan to close any sooner than 30 days. Because the lender can only have... [more...]

There is so much more involved to getting a mortgage than getting the “Lowest Rate” Here are a few things I do for my valued clients, proving that its about the service provided and the whole package and not only about the rate… 1. I personally like to evaluate a client’s full financial picture. Maybe they should finance 100% and eliminate all of their debt or bits and pieces of it. 2. Should they do one loan at 100% or two loans such as 80/20, pay PMI (Private Mortgage Insurance) or have a higher interest rate and no PMI. 3. Each loan is custom tailored to fit the client’s... [more...]