Questions and Answers with Bankrate.com | Marshfield Real Estate

Courtesy of Bankrate.com for The Marshfield Mariner, May 16th, 2012
Question:? There were some recent changes to rules regarding FHA refinances.? What are they?
Answer:? The Federal Housing Administration will put some of its home loans on sale starting in June, offering low-fee refinances for its current borrowers who took out mortgages before June 2009.
Starting June 11th, borrowers can take advantage of the revised streamlined refinancing program by paying a 0.01% mortgage insurance premium at closing and an annual insurance fee of 0.55% of the loan.
Those are significantly lower mortgage fees than borrowers now pay.? Most paid a 1% mortgage insurance premium up front plus 1.10 to 1.15% every year.
For every $100,000 financed, the up-front fee would fall from $1,9000 to just $10, while the annual fee would fall from $1.150 to $550.
To take advantage of the sale, you hae to meet three conditions:
**no late mortgage payments for the past 12 months **your FHA mortgage has an effective date ? typically about a week after closing ? on or before May 31st, 2009. **you have enough cash on hand to pay closing costs
Question:? There was also talk of changes to FHA loan eligibility.? What are those changes?
Answer:? A new rule that was supposed to take effect in April would have disqualified many borrowers with over $1,000 in unresolved debts that are in dispute or in collection.
However, the FHA is taking a second look at that requirement and has delayed its implementation until July at the earliest.
To get an FHA loan, you need two things:? a two-year history of on-time bill payments and two years of steady employment.? Even with these requirements, exceptions are made.
You can also be carrying more debt.
To obtain most non-FHA loans, borrowers must be spending no more than 36% of their pretax income on all debts, including mortgage payments, student loans, credit card bills and auto loans.
With an FHA loan, lenders will allow you to spend up to 41% of your pretax income on debt.? Some lenders will stretch that to 43% for borrowers with an excellent payment history.? Use your own discretion on whether you should stretch your budge to spend that much of your pay on debt payments.
You can apply for FHA-backed refinancing form most banks and mortgage companies.
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This entry was posted in Financing, Foreclosure, Home Buying, Home Insurance, Market Conditions, Mortgage, Quality of Life and tagged Federal Housing Administration, FHA loan eligibility, FHA refinances, mortgage insurance premiums, Mortgage refinancing. Bookmark the permalink.

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