FHA to Decrease Refinance Fees

FHA (Federal Housing Administration) will lower the mortgage insurance premiums and annual fees for borrowers who refinance their loans as part of President Obama's plan to improve the housing market.

Borrowers who refinance their existing FHA loans will pay an upfront insurance premium equal to 0.01%, the lowest allowable rate, of the mortgage amount. For example, $100 for a $100,000 loan - plus an annual fee of 0.55% (down from 1.15%).  This is effective June 11, 2012.

Qualifying borrowers must be current on an existing FHA-insured mortgage signed on or before May 31, 2009.  An estimated of 2 to 3 million borrowers will benefit from this new program.  The program doesn't require verification of income and employment, and it doesn't mandate a new appraisal of the property.  A typical borrower would save about $1,000 a year in premiums and $3,000 a year including savings from lower rates, the FHA said.

The new plan is in contrast with the new increase in upfront fee and annual fee for the new borrowers.  A borrower making a 3.5% down payment on a home purchase as of April 1 will pay a 1.75% upfront fee and a 1.25% annual fee. 

If you have any questions, don't hesitate to contact me. For more fantastic housing deals, please visit www.anchoragehomedeals.com.

Is Housing Crisis Going to End by End of 2012?

According to a recent report released by Capital Economics, the housing crisis is expected to end this year. The reason behind this theory is due to banks finally loosing up their credit standards.     

Since the 2008 housing market bubble popped, credit standards have increased leaving many people with little to no chance of obtaining a loan to buy a home.  Before the crisis began, a potential home owner only needs to obtain a credit score of mid to upper 500's.  

Now, many economists home that the housing market crisis will come to an end with the easing of banks’ lending standards and a loosening of credit.

As current sign of improvement is that the banks are loosening their LTV's (loan-to-value ratios). A loan-to-value ratio or LTV ratio shows the amount of a mortgage lien as a percentage of the total appraised value of the home. For instance, if a borrower takes out a loan of $140,000 to buy a home worth $160,000, the LTV ratio is $140,000/$160,000 or 87.5%. Today, banks are showing higher LTV's.

In addition to that, the employment statistics showed continued growth for the third straight month in February as employers added 227,000 new jobs for the whole country.  Unemployment rate in Alaska was last reported at 6.9% - according to the US Federal Reserve. The unemployment rate averaged at 8.0501% from previous years. The national unemployment average is at 8.3%.  This illustrates that the Alaskan economy is outshining other economies impacted by negative housing markets.

With the current job market situation, Americans are beginning to rethink their attitudes about jumping back to the housing market.  With near record low mortgage rates and low current home prices, now is a good time to both buy and sell.  You can check out www.anchoragehomedeals.com for the best deals in Alaska.

FHA to Increase in Up-Front Mortgage Insurance - Again!

According to Bloomberg report, FHA is set to raise its mortgage insurance premiums again for the fourth time in 3 years.  Beginning April 1, the cost of up-front mortgage insurance premiums will increase by 75 basis points for new 30-year loans.  The change applies to new loans registered on, or after, April 1, 2012. “The  75 basis point increase will be in addition to a 35 basis point increase in the annual premium on loans up to $729,750 that was announced earlier last month as part of the agency’s 2013 budget”, said FHA Acting Commissioner Carol Galante. 

“For loans up to $625,000, the increase will be on top of a 10 basis point increase on annual premiums for smaller loans.   The increase will add about $5 per month to the cost of a typical FHA loan, which is about $150,000”, Galante said.

When buyers are approved for FHA loans, they are required to carry mortgage insurance.  That includes both a Mortgage Insurance Premium (MIP) and an Up Front Mortgage Insurance Premium payment into an escrow account set up by the US Treasury Department and the funds are used to protect the government in case the borrower defaults on the FHA loan.

Because the FHA backs many first-time and lower-income borrowers, the premium increases could have a negative effect on the housing market, particularly on homebuilders, according to Jaret Seiberg, senior policy analyst at Guggenheim Securities’ Washington Research Group.

“We believe this is a negative for housing as it will make it that much more expensive for first-time homebuyers to enter the market,” Seiberg said in a note to clients.

If you are planning to use FHA for your next home mortgage, get your loan application today.  If you wait, you’ll be subject to the FHA’S new premiums.  For a list of great deals in Alaska area, you may check out http://www.anchoragehomedeals.com/.