Deanna Valeo
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FHA Increases UFMIP and Monthly MI April 1st - How Does it Effect You? March 5, 2012

 

"Kind Words are the Music of the World." ~ F. W. Faber 


Dear Todd,  

FHA Increases Their Up Front and Monthly Mortgage Insurance Premiums April 1 2012 - How Does it Effect You?

In today's real estate market, many buyers are opting for the FHA route for obtaining their mortgage. FHA loans are different from Conventional loans in many ways, mainly an FHA loan is a Government loan that only requires a 3.5% down payment and a Conventional loan isn't, and it requires a minimum of 5% down payment.  Last year, the fees and Mortgage Insurance Premiums (MIP) had a change in their calculations. This caused many home buyers to be priced out of the market with their payments going up considerably.

As of April 1, 2012, FHA has yet again, changed their fees and MIP calculations. This change shouldn't price people out of the market, but there is a difference in payments that will make people say, "I'm paying how much more for the same house because of fees?"

After April 1, 2012, the Up Front MIP will go up to 1.75% of the loan and the Monthly MIP will be calculated on 1.25% of the loan.  What does this mean?

At $150,000 - Today's 3.875%, the mortgage payment will increase approximately $18.

At $200,000 - Today's 3.875%, the mortgage payment will increase approximately $24. 

At $250,000 - Today's 3.875%, the mortgage payment will increase approximately $31.

You might think it's not that big of a deal for an extra $20 here or $30 there, but it's a MONTH!  That's $240 here or $360 there a year!  It adds up. Now, multiply that out over 30 years.  

After April 1, 2012, you don't have any choice but to accept these terms if you're obtaining an FHA loan. However, prior to that date, you have a choice. As long as you start the loan process prior to April 1, you're in the clear. You do NOT have to close on a house prior to April 1.  That means, if you're thinking of buying a house in the next couple of months, and you're going to go the FHA route, you need to get pre-approved for your loan in the next month. Today is March 5 and there are 31 days in March. Let's get going! Get off the fence and keep some extra money in your pocket instead of waiting until after this important deadline!  Please keep in mind we need to have your case number in the system so we need your contract by March 329th to make the deadline.

Have a fantastic week and we will see you next week!


The Valeo-Croy Team - Call today

Todd Croy - NMLS #91428 NC, SC (704) 488-7763
Deanna Valeo - NMLS #91421 NC, SC, VA (704) 488-1421

Accessible | Program Expertise | On-Time Closings

Due to new Federal Laws we are now providing a link to Mortgage News Daily average rates for mortgages - please see the note below regarding the rates listed.

http://www.mortgagenewsdaily.com/mortgage_rates/

**Please note the rates quoted are at the absolute best loan amount, the highest credit score and lowest LTVs allowed with a 1% origination fee and indicate the absolute lowest rate possible. You should use this list as a guideline and trend indicator and get a specific quote for your project (often it may be slightly higher).
                           
Facebook link: http://www.facebook.com/valeocroyteam?v=app_4949752878

The Valeo-Croy Team and New American Mortgage Bankers are Equal Housing Lenders.This information is for illustration only. It does not constitute an application for a loan or an offer or commitment for New American Mortgage to make a loan on these terms. Interest rates are subject to change until an application is completed and you lock in your interest rate. The figures noted are estimates and may vary depending on discount points, taxes and insurance. Programs, terms and conditions are subject to change without notice. Mortgage loans are subject to credit qualifications. Normal credit standards apply.   Date:3/5//2012


Forced Place Insurance - Beware of its high costs... March 12, 2012

"There is more pleasure in loving than being loved." ~ Thomas Fuller 

Deanna and I have been getting the Mecklenburg Times for years and they have a syndicated columnist named Benny Kass of Inman News (great publication). He recently did an quick Q&A on forced placed insurance and I thought it is always a good reminder to get the message out to our clients' about what can be done if the mortgage company servicing your loan thinks you do not have adequate insurance.

Excerpt from Benny's Valentines Day article:

However, I wanted to use your issue to discuss "force-placed" insurance.

Oversimplified, every mortgage lender requires its borrowers to maintain hazard insurance. If, for example, the property burns down -- or is hit with a tornado -- the lender wants to make sure that the insurance coverage will pay off the existing loan.

There is an interesting issue as to the amount of coverage that lenders can legally require. For example, if your home is worth $500,000 but your loan is only $250,000, one would think that all you need to satisfy the lender is $250,000 (although that may be a long-run foolish decision should your house burn down).

Apparently, different states have different legal requirements, so discuss this issue with your attorney. However, at the very least, you need full replacement insurance coverage.

Back to force-placed coverage: If you do not continue to carry your own hazard insurance, your lender will obtain it for you -- i.e., it will "force" insurance on your home at your expense. And, be warned: The cost of this coverage will be considerably more expensive than if you purchased it on the open market.

There are many abuses by lenders in this area. In fact, I have just learned that agencies in New York state have started investigating companies that underwrite and sell forced-place insurance.

Bottom line: Make absolutely sure that you do not let your home (hazard) insurance lapse.

Have a fantastic week and we will see you next week!

The Valeo-Croy Team @ New American Mortgage - Call today

Todd Croy - NMLS #91428 NC, SC (704) 488-7763
Deanna Valeo - NMLS #91421 NC, SC, VA (704) 488-1421

Accessible | Program Expertise | On-Time Closings

Due to new Federal Laws we are now providing a link to Mortgage News Daily average rates for mortgages - please see the note below regarding the rates listed.

http://www.mortgagenewsdaily.com/mortgage_rates/

**Please note the rates quoted are at the absolute best loan amount, the highest credit score and lowest LTVs allowed with a 1% origination fee and indicate the absolute lowest rate possible. You should use this list as a guideline and trend indicator and get a specific quote for your project (often it may be slightly higher).
                           
Facebook link: http://www.facebook.com/valeocroyteam?v=app_4949752878

The Valeo-Croy Team and New American Mortgage Bankers are Equal Housing Lenders.This information is for illustration only. It does not constitute an application for a loan or an offer or commitment for New American Mortgage to make a loan on these terms. Interest rates are subject to change until an application is completed and you lock in your interest rate. The figures noted are estimates and may vary depending on discount points, taxes and insurance. Programs, terms and conditions are subject to change without notice. Mortgage loans are subject to credit qualifications. Normal credit standards apply.   Date:3/12//2012

 

 


The cost of doing a FHA loan goes up April 1, 2012 March 25, 2012

"The mind that is that is anxious about future events is miserable." ~ Seneca

Just a quick reminder that the cost of doing a FHA loan goes up on April 1st.  We as lenders' need to get case numbers assigned by the 30th to keep the lower costs for our clients.  Please make sure to have your fully executed contracts to your lender by early Friday March 30th to assure the lower lending costs for your client.

As a reminder, the Up Front Mortgage Insurance premium will raise to 1.75% from 1% and the monthly MI premium will rise from 1.15% to 1.20% for the year.  On a $200K loan amount it will be a $1500 and $100/year increase.

Please make sure to have your client's prepared.  

Have a fantastic week and we will see you next week!

The Valeo-Croy Team @ New American Mortgage - Call today

Todd Croy - NMLS #91428 NC, SC (704) 488-7763
Deanna Valeo - NMLS #91421 NC, SC, VA (704) 488-1421

Accessible | Program Expertise | On-Time Closings

Due to new Federal Laws we are now providing a link to Mortgage News Daily average rates for mortgages - please see the note below regarding the rates listed.

http://www.mortgagenewsdaily.com/mortgage_rates/

**Please note the rates quoted are at the absolute best loan amount, the highest credit score and lowest LTVs allowed with a 1% origination fee and indicate the absolute lowest rate possible. You should use this list as a guideline and trend indicator and get a specific quote for your project (often it may be slightly higher).
                           

Facebook link: http://www.facebook.com/valeocroyteam?v=app_4949752878

The Valeo-Croy Team and New American Mortgage Bankers are Equal Housing Lenders.This information is for illustration only. It does not constitute an application for a loan or an offer or commitment for New American Mortgage to make a loan on these terms. Interest rates are subject to change until an application is completed and you lock in your interest rate. The figures noted are estimates and may vary depending on discount points, taxes and insurance. Programs, terms and conditions are subject to change without notice. Mortgage loans are subject to credit qualifications. Normal credit standards apply.   Date:3/26//2012