Tuesday, April 6, 2010
4/06/2010 12:13:00 PM | Posted by
Arbor Mortgage
Effective February 1, 2010, HUD has suspended the rule that prevented a buyer from obtaining FHA financing on a home which had been owned by a seller for less than 90 days. This guideline was commonly called “the anti-flip rule”. This suspension of the rule or “flipping waiver” is valid for 12 months and is a boon for real estate investors because they can now turn their flips much more quickly by opening up the huge pool of FHA buyers.
Now, this may seem like old news – it’s April already, and this has been out for 2 months. Yet, the lending canvas has been strangely silent on it. Many lenders just aren’t allowing it. They are refusing to honor the flip waivers, because they see the limited time the seller owns the home as a large risk, and possibly an easy area for fraud.
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Wednesday, March 31, 2010
The most common question we get at Arbor Mortgage is “Can I even get a loan?”. Mortgage loans are about the 3 C’s – Credit, Capacity and Collateral. Collateral, or the home being secured by the loan, is most often not in the client’s control. Credit and Capacity (or ability to pay/income), however, are in the client’s control. So, let’s talk about what YOU can do to make yourself approvable.
Credit
Most lenders are requiring at least a 620 credit score in order to obtain a mortgage loan. 620 is not a magic number, though. Lenders are still looking at the actual credit history as well. It’s important to have at least 1 year “clean”; meaning no late payments in the last year. If there are late payments in the last year, be prepared to explain and document them.
Tuesday, March 23, 2010
Many will argue that the biggest problem affecting mortgage lending today is declining property values. According to First American Core Logic’s Negative Equity report, more than 1 and 4 families are underwater on their mortgage; meaning that they owe more than the property is worth. Michigan is actually fourth in the nation with 38.5% of mortgages underwater. These are the same people that are struggling with today’s other problems; unemployment and underemployment. At a time when home owner’s need lower payments to survive, and the interest rates are actually low enough to make that happen, people think they will never get approved because their home value is diminished.
This is simply not true. Cue “short refinance”, with the glowing white light and “hallelujah” chorus. What is a “short refinance”? Much like a short sale, it’s when a bank or lending institution takes less than the full balance of the loan as payment in full. In the case of a refinance, they provide a payoff to the new lender for the lesser balance and they write off the difference.
Tuesday, January 26, 2010
On January 20, 2010 the Federal Housing Administration (FHA) commissioner David Stevens announced a set of policy changes that will tighten the qualifications even further, making it even harder to obtain a government backed mortgage.
The first change to take effect will be the increase in mortgage insurance premium (MIP). The increase is to build up the agency’s reserves. On April 5, 2010, the premium will increase from 1.75% to 2.25% of the loan amount for single family programs with certain exceptions. This adds $500 to every $100,000 of mortgage loan to a borrower’s closing costs.
Another proposed change requires a minimum credit score for FHA’s 3.5% down payment program. If a buyer has less than a 580 credit score, a down payment of up to 10% may be necessary. According to the Department of Housing and Urban Development (press release HUD No. 10-016), “This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer”.
The first change to take effect will be the increase in mortgage insurance premium (MIP). The increase is to build up the agency’s reserves. On April 5, 2010, the premium will increase from 1.75% to 2.25% of the loan amount for single family programs with certain exceptions. This adds $500 to every $100,000 of mortgage loan to a borrower’s closing costs.
Another proposed change requires a minimum credit score for FHA’s 3.5% down payment program. If a buyer has less than a 580 credit score, a down payment of up to 10% may be necessary. According to the Department of Housing and Urban Development (press release HUD No. 10-016), “This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer”.
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- Arbor Mortgage
- Arbor Mortgage is a Michigan based mortgage lender that has been providing mortgage solutions for more than a decade. Since 1998, Arbor Mortgage has helped more than 20,000 people purchase or refinance their homes. Arbor offers a variety of mortgage programs including FHA, USDA Rural Development, VA, Conventional and Alternative loans.
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