Beware! FHA Guidelines To Change in April!

The FHA, who lately has originated almost a third of all home loans, is overhauling its system come April 5th of this year.  Why would this be done when its loan program is so successful, so popular?  Mostly this is being done in an effort to bolster it's balance sheet and falling capital reserves.  In other words, the FHA is attempting to position itself better to "manage its risk while continuing to support the nation’s housing market". Unfortunately this also means that it will become increasingly more difficult to secure an FHA loan.  Ugh.  So without further ado, here are the changes: Maximum seller contributions are reduced from 6 percent to 3 percent An increase in Upfront Mortgage Insurance Premiums from 1.75 percent to 2.25 percent A Congressional request to increase monthly mortgage insurance premiums even higher The good news is that the biggest expected change (the proposed increase for the FHA minimum downpayment) didn't make the final cut.  Luckily this means you can still get into a home with 3.5% down.  Whew. Also, the FHA'S NEW GUIDELINES institute a minimum FICO score of 580 to make this 3.5% downpayment, while requiring 10 percent down for any applicant whose ...

How to Estimate Your Payments Using Mortgage Loan Calculators

This week, our guest blogger Jennifer tells us the benefits of using mortgage calculators when considering a home loan.  Enjoy! Online mortgage calculators will help you in planning and acquiring a home loan for your dream home.  These loan mortgage calculators are user-friendly tools which will help you in knowing your monthly payments, interest rates, pay-off dates, amortization schedule, etc.  Have a look at the top 5 mortgage calculators: Home affordability calculator: This loan mortgage calculator will give you an idea about the loan amount that you can afford to buy a house. You’ll have to mention the required loan amount, interest rate, time period, etc to determine your monthly payments and required income.   APR calculator: You will be able to calculate the annual percentage rate on your mortgage and get an amortization sheet of your monthly payments by using this calculator. You need to enter your interest rate, loan term, mortgage amount and additional costs to calculate APR. The additional costs would include the fees that you pay at the closing.       Refinance calculator: You can use this calculator to find out how much you can save by ...

90 Day Flipping Rule Suspended For One Year!

Great news for investors!  Admitting that it is in fact possible to buy, rehab, and sell a property in less than 90 days, the Federal Housing Administration (FHA) has suspended it's infamous 90 day seasoning requirement!  This is also great news for home buyers, as this suspension should effectively allow quite a few more houses onto the market that otherwise would be just "seasoning" (aka sitting) on the market for 90 days.  Before we get into this too deep, lets first get an idea of what this seasoning requirement originally entailed.  Basically, since 2003, the FHA has required that a house is "seasoned" on the market for 90 days before it is allowed to be resold.  This means that an investor or any other person who purchased a property had to wait for approximately 3 months before they were allowed to sell the house to an FHA insured buyer.  More than anything, this was done to prevent people from buying a house and immediately selling it at an inflated price to a naive or uninformed buyer.  Luckily, over the past several years, most of the riff raff has been weeded out of ...