The loan you are refinancing must be an FHA Loan (can not have been a FHA Secure Loan). The old and new terms must fall under one of the following scenerio's
ARM-ARM Immediate payment reduction required and the maximum interest rate of the new mortgage doesn't exceed the maximum interest rate of the old.
ARM-Fixed Interest rate on the new Fixed will be no greater than 2% above the current rate of the ARM
Fixed-ARM Interest rate of the new mortgage is at least 2% below the interest rate of the current mortgage
Fixed-Hybrid ARM Immediate payment reduction is required
The loan being refinance must be FHA insured and you can not increase the term of the loan more than 10 years.
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Friday, November 28, 2008
Thursday, November 27, 2008
What Documents are needed to do a Streamline loan
Putting together a FHA Refinance streamline loan is simple. You generally do not need to document credit, income or appraisal value. There are exceptions and I will go into that at a later date. The following documents are needed for a streamline loan:
Old case number
Original note
12 month Mortgage Rating, if the loan is new document from the time of the new loan(MLHL allows 1x30 days late in the last 12 months)
Application (short version)
– Name, address, social security and phone
– Current employment, phone
FHA Streamline worksheet
New FHA Transmittal
Netting Authorization from FHA Connection
Verification of Social Security number
Borrowers authorization form signed
CAVIRS
Disclosures
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Old case number
Original note
12 month Mortgage Rating, if the loan is new document from the time of the new loan(MLHL allows 1x30 days late in the last 12 months)
Application (short version)
– Name, address, social security and phone
– Current employment, phone
FHA Streamline worksheet
New FHA Transmittal
Netting Authorization from FHA Connection
Verification of Social Security number
Borrowers authorization form signed
CAVIRS
Disclosures
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Tuesday, November 11, 2008
HUD Homes can help homeowner strapped for down payment
With the market getting tighter the need to find a 100% loan is becoming increasingly harder to find. Don't forget HUD homes. The borrower finds a realtor that deals with HUD homes and makes a bid on a property that is owned by HUD. If the bid is accepted the down will be specified in the sales contract usually the down is $100, $500. If you want to know more go to
About Buying HUD Homes
Property Searh
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
About Buying HUD Homes
Property Searh
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Monday, November 10, 2008
FHA announces 2009 Loan Limits
FHA issues Mortgagee Letter 08-36 announces 2009 Loan Limits
Attachment I -- FHA Loan Limits for Areas AT CEILING AND ABOVE
Attachment II -- FHA Loan Limits for Areas BETWEEN CEILING AND FLOOR
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Attachment I -- FHA Loan Limits for Areas AT CEILING AND ABOVE
Attachment II -- FHA Loan Limits for Areas BETWEEN CEILING AND FLOOR
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Wednesday, October 29, 2008
Calculating Income to qualify for a mortgage
Processing Tip
The credit freeze has made underwriting more particular than ever. Here are a few pointers to help you get your loan approved the first time. Loans that loose their Accept status when they are underwritten usually loose this because the underwriter calculates the income differently than you did. Many times if the underwriter knew how you calculated the borrowers income they would accept it. If I was processing a loan I would always include the calculation of income in my loan file. Make sure you know the guide lines regarding the income calculation. If you want an exception from the guidelines be sure and state the reason you feel the borrower deserves this exception. Example: overtime usually always requires a two year history. Your borrower has only been on the current job 12 months. However they had overtime in the previous job. In this scenario include a VOE of both jobs documenting a two year history. Don’t assume because an employer requires over time that they underwriter will accept that as a reason to have less than two years.
I also find this IRS web site in determining what income is tax deductable or how it should be reported to be helpful - IRS Frequently Asked Questions . Attached is an income worksheet that you could use to calculate income and include in your loan file
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
The credit freeze has made underwriting more particular than ever. Here are a few pointers to help you get your loan approved the first time. Loans that loose their Accept status when they are underwritten usually loose this because the underwriter calculates the income differently than you did. Many times if the underwriter knew how you calculated the borrowers income they would accept it. If I was processing a loan I would always include the calculation of income in my loan file. Make sure you know the guide lines regarding the income calculation. If you want an exception from the guidelines be sure and state the reason you feel the borrower deserves this exception. Example: overtime usually always requires a two year history. Your borrower has only been on the current job 12 months. However they had overtime in the previous job. In this scenario include a VOE of both jobs documenting a two year history. Don’t assume because an employer requires over time that they underwriter will accept that as a reason to have less than two years.
I also find this IRS web site in determining what income is tax deductable or how it should be reported to be helpful - IRS Frequently Asked Questions . Attached is an income worksheet that you could use to calculate income and include in your loan file
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Wednesday, October 22, 2008
Hope for Homeowners
Effort continues to be made to help homeowners to avoid foreclosure. HUD releases two mortgagee letters for Hope for America Homeowners 2008-30 and 2008-29. Currently no lender is offering this program but here is a recent article that says some are signing up
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Monday, September 29, 2008
Don't forget Oct 1, 2008 changes
What is happening today in mortgage lending: The Federal Housing Administration (FHA) has developed form HUD-92900-LT, FHA Loan Underwriting and Transmittal Summary (LT) to replace both mortgage credit analysis worksheets, HUD-92900-PUR and HUD-92900-WS (MCAWs ) remember that this new forms will be required October 1, 2008. The form HUD-92900-A, Addendum to Uniform Residential Loan Application, has also been updated with minor revisions also required October 1, 2008. This information can be found in MTG letter 2008-15Seller paid DPAs will be gone by October 1, 2008 however most lenders have already announced they are no longer accepting new applications with a DPA. If you have some time to spend you can go to this grant website http://www.grants.gov/ and find a grant. FHA does still accept grants. You can also access this web site by going to my blog clicking on “FHA Tips” on the right hand side, from the FHA Tip page you can find on the left hand side “Helpful FHA Websites” and click on "FHA Allowable Grants". I do want to caution you it would be labor intensive task.The down payment for FHA is scheduled to change January 1, 2009 from 3% to 3.5%The new FHA loan limit will be the greater of $271,050 or 115 percent of an area's median home price, up to $625,500, the temporary limits are still good until Dec. 31, 2008.
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Tuesday, September 2, 2008
Now DPAs are gone, now what?
Now that DPA’s are pretty much gone. How can your borrower come up with the down payment?
There is always the option to save for the down payment, which seems hard for many borrowers. Other options are:
1-Gifts from a relative, borrowers employer, charitable organization, government agency or public entity or a close family friend (transaction must be documented).
2-Collateralized loans (i.e. borrower has a loan against an auto would be acceptable transaction must be documented as well as the value of the auto)
3-Sale of personal property (i.e. sale a car again the transaction must be documented as well as the original ownership and value of the car).
4-The borrower can borrower from his 401K or IRA the transaction must be documented.
5- Side jobs a borrower would have to document that they received the income and performed the work and could not be done for someone that is involved in the transaction. It could not be used as qualifying income only for down payment.
6-Employer assistance programs (must be documented)
7-borrower focus on paying off other monthly debt and save future payments towards down payment
8-Commission from sale if the borrower is a licensed real estate agent or a family member the commission can apply towards down payment
9-Sweat Equity this only applies to new homes and must meet requirements of the 4155
10-Cash value from a life insurance policy
11-Rent Credits-this is the cumulative amount of the rental payment that exceed the appraised estimate of fair market rent this is only for lease with option to buy. Must have copies of cancelled checks.
12-Grants
Can you think of any other options?
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
There is always the option to save for the down payment, which seems hard for many borrowers. Other options are:
1-Gifts from a relative, borrowers employer, charitable organization, government agency or public entity or a close family friend (transaction must be documented).
2-Collateralized loans (i.e. borrower has a loan against an auto would be acceptable transaction must be documented as well as the value of the auto)
3-Sale of personal property (i.e. sale a car again the transaction must be documented as well as the original ownership and value of the car).
4-The borrower can borrower from his 401K or IRA the transaction must be documented.
5- Side jobs a borrower would have to document that they received the income and performed the work and could not be done for someone that is involved in the transaction. It could not be used as qualifying income only for down payment.
6-Employer assistance programs (must be documented)
7-borrower focus on paying off other monthly debt and save future payments towards down payment
8-Commission from sale if the borrower is a licensed real estate agent or a family member the commission can apply towards down payment
9-Sweat Equity this only applies to new homes and must meet requirements of the 4155
10-Cash value from a life insurance policy
11-Rent Credits-this is the cumulative amount of the rental payment that exceed the appraised estimate of fair market rent this is only for lease with option to buy. Must have copies of cancelled checks.
12-Grants
Can you think of any other options?
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Thursday, July 17, 2008
FHA TIP
3/1 FHA ARM
The 1 and 3-year FHA ARMs are the best ARMS out there right now. As you know there is no pre payment penalty. The index is the Weekly average yield on U.S. Treasury Securities adjusted to constant maturity of one year.
The FHA 1-, and 3-year ARMs allow up to a one percentage point annual interest rate adjustment after the initial fixed interest rate period and up to a five percentage point interest rate cap over the life of the loan. Most ARMS can adjust 2% a year and 6% over the life of the loan.
The FHA 5-, 7-, and 10-year ARMs allow up to a two percentage point annual interest rate adjustment after the initial fixed interest rate period and up to a six percentage point interest rate cap over the life of the loan.The other day I was noticing that a 30 year Fixed rate was paying the same yield at 6.375 as was the 3/1 ARM. If we were to do a loan on the 3/1 arm vs. the 30 year with the loan amount at $100,000 and assuming that worst case on the ARM adjustments, this is what the next five years would look like:
30 year PI payment would be $623.86 at the end of three years the balance on the loan would be $96,336 at the end of four years the balance would be $94,951 and the borrower would have paid a total of $29,945
The 3/1 Arm The first three years the borrower would make payments of $559.97 at the end of the third year their balance would be $95,633. Assuming worst case at the end of the third year and the rate went up 1 % their new payment would be $619.31 and their balance at the end of the fourth year would be $94,258. Lets say the end of the fourth year the rate went up again 1% the new rate would be 7.375 and their payment would be $679.79 it take until the fifth year for the payment to be higher than on the 30 year fixed. The total they would pay out over the four years would have been $27,589 still less than the 30 year fixed. Its going to take several years even after the payment becomes higher than the 30 year fixed before the consumer pays out what they do on a 30 year fixed.
If the borrower made the 30 year fixed payment towards the 3/1 ARM loan the savings would be Hugh by the time they reached the end of their fourth year the balance on the loan would be $91,548. I think the 3/1 ARM is a great program.
Remember if the LTV is higher than 90% on the 1 year arm you have to qualify 1% above the start rate. "You may want to check my math but I think the idea is close"
Want to learn more about ARMS? Try this link out http://www.federalreserve.gov/pubs/arms/arms_english.htm
The 1 and 3-year FHA ARMs are the best ARMS out there right now. As you know there is no pre payment penalty. The index is the Weekly average yield on U.S. Treasury Securities adjusted to constant maturity of one year.
The FHA 1-, and 3-year ARMs allow up to a one percentage point annual interest rate adjustment after the initial fixed interest rate period and up to a five percentage point interest rate cap over the life of the loan. Most ARMS can adjust 2% a year and 6% over the life of the loan.
The FHA 5-, 7-, and 10-year ARMs allow up to a two percentage point annual interest rate adjustment after the initial fixed interest rate period and up to a six percentage point interest rate cap over the life of the loan.The other day I was noticing that a 30 year Fixed rate was paying the same yield at 6.375 as was the 3/1 ARM. If we were to do a loan on the 3/1 arm vs. the 30 year with the loan amount at $100,000 and assuming that worst case on the ARM adjustments, this is what the next five years would look like:
30 year PI payment would be $623.86 at the end of three years the balance on the loan would be $96,336 at the end of four years the balance would be $94,951 and the borrower would have paid a total of $29,945
The 3/1 Arm The first three years the borrower would make payments of $559.97 at the end of the third year their balance would be $95,633. Assuming worst case at the end of the third year and the rate went up 1 % their new payment would be $619.31 and their balance at the end of the fourth year would be $94,258. Lets say the end of the fourth year the rate went up again 1% the new rate would be 7.375 and their payment would be $679.79 it take until the fifth year for the payment to be higher than on the 30 year fixed. The total they would pay out over the four years would have been $27,589 still less than the 30 year fixed. Its going to take several years even after the payment becomes higher than the 30 year fixed before the consumer pays out what they do on a 30 year fixed.
If the borrower made the 30 year fixed payment towards the 3/1 ARM loan the savings would be Hugh by the time they reached the end of their fourth year the balance on the loan would be $91,548. I think the 3/1 ARM is a great program.
Remember if the LTV is higher than 90% on the 1 year arm you have to qualify 1% above the start rate. "You may want to check my math but I think the idea is close"
Want to learn more about ARMS? Try this link out http://www.federalreserve.gov/pubs/arms/arms_english.htm
Wednesday, June 25, 2008
New Mortgagee Letter 2008-17
FHA News
Non FHA-approved Mortgage Bokers – Forward Mortgages 2008-17
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/08-17ml.doc
Non FHA-approved Mortgage Bokers – Forward Mortgages 2008-17
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/08-17ml.doc
Friday, June 13, 2008
Mortgagee Letter 08-16 FHA Changes MI
If you are doing FHA loans you must read this mortgagee Letter
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/08-16ml.doc
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/08-16ml.doc
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Thursday, May 29, 2008
FHA News
FHA just issued Mortgagee Letter 08-15. This mortgagee letter announces that the MCAW is being replaced with form HUD92900-LT. You may begin using this from June 9th and must use it by October 1, 2008.
FHA Single Family Implements Risk-Based Mortgage Insurance Premiums
Implements risk-based premiums for most Title II single family mortgage insurance programs, enabling mortgage lenders to offer borrowers FHA-insured financing with a range of mortgage insurance premiums based on the risk the insurance contract represents. Effective July 14, 2008.
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
FHA Single Family Implements Risk-Based Mortgage Insurance Premiums
Implements risk-based premiums for most Title II single family mortgage insurance programs, enabling mortgage lenders to offer borrowers FHA-insured financing with a range of mortgage insurance premiums based on the risk the insurance contract represents. Effective July 14, 2008.
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Wednesday, May 28, 2008
FHA Tip: FHASecure Program
FHA Tip: FHASecure
Did you catch mortgagee letter 2008-13 that I sent out a few weeks ago?
The FHASecure program was designed to help borrowers who are facing Non FHA ARMS that are getting ready to reset.
FHA now allows the borrower to have had 2x30 or 1x60 days lates in the prior 12 months before the reset of the ARM.
FHA also allows: Borrowers who are delinquent on their non-FHA ARMs due to a rate reset or the occurrence of an extenuating circumstance but experienced no more than one 90-day late payment or no more than three 30-day late payments prior to the rate reset or extenuating circumstance that caused the delinquency provided the loan-to-value on the FHA insured first mortgages does not exceed 90 percent
Remember your upfront MI is different on this program. Please review Mortgage letter 2008-13 for complete details
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Did you catch mortgagee letter 2008-13 that I sent out a few weeks ago?
The FHASecure program was designed to help borrowers who are facing Non FHA ARMS that are getting ready to reset.
FHA now allows the borrower to have had 2x30 or 1x60 days lates in the prior 12 months before the reset of the ARM.
FHA also allows: Borrowers who are delinquent on their non-FHA ARMs due to a rate reset or the occurrence of an extenuating circumstance but experienced no more than one 90-day late payment or no more than three 30-day late payments prior to the rate reset or extenuating circumstance that caused the delinquency provided the loan-to-value on the FHA insured first mortgages does not exceed 90 percent
Remember your upfront MI is different on this program. Please review Mortgage letter 2008-13 for complete details
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Monday, May 26, 2008
FHA TIP CABO Standards allow for higher ratios
Did you know that if your property meets CABO standards(Council of American Building Officials) you can have higher ratio's in a manual underwrite?
The ratios can be33/45 for ENERGY-EFFICIENT HOMES (EEH). The benchmark qualifying ratios may both be exceeded by up to 2 percentage points when the borrower is purchasing or refinancing an EEH. These higher housing expense- and obligations-to-income ratios are justified due to the anticipated energy costs savings and become 33 percent and 45 percent, respectively. The appropriate HOC determines if a property qualifies for EEH designation. The original documentation attesting to energy efficiency is required on resales.
All properties meeting the Council of American Building Officials (CABO) 1992 Model Energy Code (MEC) are considered energy efficient and eligible for the two percentage points increase in the qualifying ratios.
You would need the Builder's Certification completed and the builder would need to certifys that the property meets CABO standards. The builder Certification can be found at HUD Clips form number 92541
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
The ratios can be33/45 for ENERGY-EFFICIENT HOMES (EEH). The benchmark qualifying ratios may both be exceeded by up to 2 percentage points when the borrower is purchasing or refinancing an EEH. These higher housing expense- and obligations-to-income ratios are justified due to the anticipated energy costs savings and become 33 percent and 45 percent, respectively. The appropriate HOC determines if a property qualifies for EEH designation. The original documentation attesting to energy efficiency is required on resales.
All properties meeting the Council of American Building Officials (CABO) 1992 Model Energy Code (MEC) are considered energy efficient and eligible for the two percentage points increase in the qualifying ratios.
You would need the Builder's Certification completed and the builder would need to certifys that the property meets CABO standards. The builder Certification can be found at HUD Clips form number 92541
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Monday, May 12, 2008
FHA Tip: Properties Under construction or Existing Construction Less Than One Year Old
Properties Under Construction or Existing Construction Less than One Year Old Maximum Financing May Not be Allowed unless...
Properties not meeting the criteria shown below are considered as under construction or existing construction-less than one year old and are limited to 90 percent financing, i.e., 90 percent of the lesser of the appraiser’s estimate of value or sales price, plus or minus the adjustments required by paragraph 1-7, A-C. For a property to be eligible for greater than 90 percent financing, whether or not it has been previously occupied, it must meet one of the criteria described below. Otherwise, the property is classified as "under construction" or "less than one year old" and is limited to 90 percent financing.
1. Construction was completed more than one year preceding the borrower's signature on the Addendum to Uniform Residential Loan Application (form HUD-92900-A, page 2); or
2. The dwelling's site plans and materials were approved by the Department of Veterans Affairs (VA), an eligible DE underwriter, or a builder under FHA's builder certification procedures, (see HUD Handbook 4145.1 REV-2) before construction began; or
3. The local jurisdiction has issued both a building permit (prior to construction) and a Certificate of Occupancy or equivalent. (NOTE: This paragraph does not apply to condominiums or manufactured housing because of the special circumstances regarding their approval.); or
4. The dwelling is covered by a builder's ten-year insured warranty plan that is acceptable to HUD; or
5. The dwelling will be moved to a new location and the property is eligible for an insured mortgage at the new location by one of the methods described in 2 above.
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
Properties not meeting the criteria shown below are considered as under construction or existing construction-less than one year old and are limited to 90 percent financing, i.e., 90 percent of the lesser of the appraiser’s estimate of value or sales price, plus or minus the adjustments required by paragraph 1-7, A-C. For a property to be eligible for greater than 90 percent financing, whether or not it has been previously occupied, it must meet one of the criteria described below. Otherwise, the property is classified as "under construction" or "less than one year old" and is limited to 90 percent financing.
1. Construction was completed more than one year preceding the borrower's signature on the Addendum to Uniform Residential Loan Application (form HUD-92900-A, page 2); or
2. The dwelling's site plans and materials were approved by the Department of Veterans Affairs (VA), an eligible DE underwriter, or a builder under FHA's builder certification procedures, (see HUD Handbook 4145.1 REV-2) before construction began; or
3. The local jurisdiction has issued both a building permit (prior to construction) and a Certificate of Occupancy or equivalent. (NOTE: This paragraph does not apply to condominiums or manufactured housing because of the special circumstances regarding their approval.); or
4. The dwelling is covered by a builder's ten-year insured warranty plan that is acceptable to HUD; or
5. The dwelling will be moved to a new location and the property is eligible for an insured mortgage at the new location by one of the methods described in 2 above.
Shirley Nault has been a mortgage professional for over 20 years. Visit her other mortgage web sites go to www.mtgview.blogspot.com or www.dutips.blogspot.com
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