Here is something that might be coming down the road pretty soon to help even more people that are underwater on their mortgage and still have paid on time. Extending and making a few changes to the HARP program, so if your mortgage is owned by Fannie Mae or Freddie Mac, you have a chance to get the lower rates of the current market even if you owe more then your home is worth. Here is an article CNBC is reporting from Reuters and a website link for more info on the HARP program.

Want to look up your own loan and see if it is a Fannie Mae or Freddie Mac owned loan, just visit THIS SITE.

Thats right, looks like if you pay your mortgage on time, you get a bonus according to the article I found down below. Read on and see what you think……..

Should Everyone Get Bonus For Paying Mortgage On Time?

Published: Monday, 11 Jul 2011 | 3:23 PM ET

By: Diana Olick
CNBC Real Estate Reporter

At what point is moral hazard trumped by corporate survival and the cold hard need to get people to pay their mortgages? The answer is: Now.

As home values continue to fall and more borrowers fall into a negative equity position on their home loans, those who stand to lose, banks and investors, are working to keep borrowers current.

To date, they have focused on delinquent borrowers, offering loan modifications and foreclosure alternatives, like short sales and deeds in lieu of foreclosure.

Last fall, New Jersey-based Loan Value Group launched a new business model, offering lenders and mortgage investors a way to keep their current, but underwater, borrowers current through cash incentives.

It’s called Responsible Homeowner Reward, and today, one of the nation’s largest mortgage insurers, PMI Mortgage Insurance, joined in.

Here’s how it works………..READ MORE.

Here is a good program, want all the details? Visit the link below for the information directly from FHA/HUD:

FHA Power Saver Program

Here are the bullet points:

Qualification for this program could change before the launch, but here are some general guidelines currently:

1. Minimum credit scores of at least 660

2. Total Debt-to-income ratios of no higher than 45 percent

3. Combined loan-to-value (including the PowerSaver loan) of no more than 100 percent

Sounds like a great program and hope people take advantage of this! Here are the lenders who will be offering it: Lenders for the FHA Power Saver program

Different types of mortgage calculators to calculate your affordability

You should use a home mortgage calculator before you get a loan to buy your house. The home loan that you will take will depend on the type of house you will be buying. Thus, you can first decide on the house you will buy. You will then come to know the cost of the house and then decide on the loan amount. However, before you can start shopping for the home loan you need to decide if you can afford to pay on the loan. A home mortgage calculator helps you to find out your affordability.

Types of mortgage calculators

There are different types of home mortgage calculators according to your needs. The types are explained below:

1. Cost calculator – With the help of a cost calculator you will be able to calculate the entire cost of buying your home.

2. Monthly payment calculator – With this type, you will be able to calculate the payment that you will have to make each month in order to pay off the home loan. You will get to know in advance the amount you will have to pay and thus it becomes much easier for you to decide on a particular loan.

3. Repayment calculator – With the help of a repayment calculator, you will come to know what your repayments will be.

4. Interest only mortgage calculator – In some cases your mortgage loan requires you to pay only the interest for a certain amount of time. So, if you need to find out the standard monthly payment and the interest payment you can use this calculator. This helps to find out how much actually you will be paying toward the interest.

5. Adjustable rate mortgage calculator – If you use this calculator you will come to know as to how much you will have to pay toward an adjustable rate mortgage. As this home mortgage calculator starts with low interest, the interest rate to be charged each month remains low. However, in the future interest rate can rise and you need to keep this in mind while using this calculator.

6. Amortization schedule calculator – With this calculator you will know how your monthly payments can reduce the loan term. It gives the details on how your monthly payments are split into payments toward the principal and the interest. You can thus increase your monthly payment amount with the help of this calculator. If you increase your monthly payment you will be able to pay off this home loan much faster.

Thus, a home mortgage calculator will give you a clear idea, how much the mortgage is going to cost you and whether or not it will be according to your affordability. You can use the above mentioned calculators according to your need.

The new date for the FHA mortgage insurance is going up for any new case id numbers ordered past Oct 4th, 2010. The mortgagee letter has not come out yet but it was passed through congress (HR 5981) for this to take place.

This is the break down:

Old: 2.25% Upfront mortgage insurance premium .55% Monthly payments NEW: 1.00% Upfront mortgage insurance premiums .85 to .90% monthly and HUD could raise to 1.55% max when needed. Well, you might be thinking this is a good deal because the UFMIP went down a lot and monthly barely went up…….well think again. Here is a video showing how this is just increasing the costs a lot more for homebuyers. http://www.thinkbigworksmall.com/mypage/archive/1/52542/

And for those of you who just want the math, here you go:

Examples

OLD WAY: $200,000 mortgage $204,500 with UFMIP (2.25%) $1,098 per month P&I (5% rate)plus $94 monthly MI(.55%) Equals: $1192 a month

NEW WAY after October 4th, 2010: $200,000 mortgage $202,000 with UFMIP (1.00%) $1084 per month P&I (5% rate)plus $152 monthly MI (.90%) Equals: $1236 a month

Sooooooooooo………$1236 – $1192 = $44 increase per month.

Now there is a good thing that comes out of this, the borrower has a lower upfront cost but a lot higher monthly. Right now with the rates low it is cheaper to finance the mortgage insurance amoutn rather then pay higher monthly. When rates go up then it will be better for borrowers.  Hope this helps and would like to hear what you think.

As stated before about FHA mortgage costs going up in September, looks like HUD pushed back the increase in mortgage costs to October 4th. Still need to wait for the mortgagee letter to come out and make it official. Find out more at www.hud.gov.

Yes, the cost of an FHA mortgage is going up for any new case id numbers ordered past September 7th, 2010. The mortgagee letter has not come out yet but it was passed through congress (HR 5981) for this to take place. Here is the break down:

Old:

2.25% Upfront mortgage insurance premium

.55% Monthly payments

NEW:

1.00% Upfront mortgage insurance premiums

.85 to .90% monthly and HUD could raise to 1.55% max when needed.

Well, you might be thinking this is a good deal  because the UFMIP went down a lot and monthly barely went up…….well think again. Here is a video showing how this is just increasing the costs a lot more for homebuyers.

http://www.thinkbigworksmall.com/mypage/archive/1/52542/

And for those of you who just want the math, here you go:

Examples  OLD WAY:

$200,000 mortgage

$204,500 with UFMIP (2.25%)

$1,098 per month P&I (5% rate)plus $94 monthly MI(.55%)

Equals: $1192 a month

NEW WAY after September 7th, 2010:

$200,000 mortgage

$202,000 with UFMIP (1.00%)

$1084 per month P&I (5% rate)plus $152 monthly MI (.90%)

Equals: $1236 a month

Sooooooooooo………$1236 – $1192 = $44 increase per month.

This is a good reason of why anyone who is getting an FHA mortgage should get it done before September 7th, 2010 or they will be paying more for their financing. Hope this helps and would like to hear what you think.

Since Feb. 1st Condo’s and FHA have changed as people are starting to find out. More changes are happening for FHA with the costs for an FHA mortgage are going up after April 5th to find out about those details just check out FHA higher costs. With the previous post about the FHA condo changes  I touched on this breifly but wanted to summerize it for you. 

The good things with this change are that once you gather up all the information like you would have had to for a “spot approval” in the past, submit the info through a Direct Endorsed Lender, then they can work on getting the condo approved. Once the condo is approved for that one buyer going into the project……..THE WHOLE PROJECT IS APPROVED and everyone within the project should be thanking that one buyer and everyone involved who went through the process.

 Couple of key things you need to watch out for that would be red flags up front:

 1. 50% of the condo units need to be owner occupied.

2. Condo association must be maintaining 10% for reserves each year in their budget (this is a big deal killer) If not then need a reserve analysis showing why they are still ok below a 10% amount.

3. FHA financing concentration is not more then 30% (it is temporarily 50% because this is new)

4. No more then 10% of the units can not be owned one investor.

5. No litigation, if so need to know who, what, when, where, and why.

 These are just some of the major items that commonly cause issues. Hope this helps and want to see the actual letter from FHA then head to this link: Mortgagee Letter 2009-46A  and 2009-46B

Hope this helps

Here comes more changes! We all have hopefully heard about the FHA Condo Changes that took place in February, but now the cost of an FHA mortgage is going up. It was only a matter of time this would happen because you have  major market share of people now only able to go under the FHA product since that is the only product with the lowest down payment available right now, unless you fit into THESE categories. Looks like April 5th, 2010 is going to be the date FHA (HUD) will make some changes and here is a summary of them.

1. Increase in upfront MIP from 1.75% to 2.25%

2. Reduction in maximum seller contributions from 6% down to 3%

3. Congressional request to increase monthly mortgage insurance premiums. For a 30 year fixed FHA those are currently .55% a month.

4. Minimum credit score of 580 in order to have only a 3.5% down payment. If below 580 then a 10% down payment is required. (of coarse most all banks are currently at 580 to 620 so this will not be a concern unless the markets credit score requirements go lower)

Want to read it for HUD’s website then keep on reading below. Hope this helps

Here is the direct link to HUD’s website for the article.

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
   • The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
   • If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
   • This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
   • The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
2. Update the combination of FICO scores and down payments for new borrowers.
   • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
   • This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
   • 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.
3. Reduce allowable seller concessions from 6% to 3%
   • The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
   • 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.
4. Increase enforcement on FHA lenders
   • Publicly report lender performance rankings to complement currently available Neighborhood Watch data – Will be available on the HUD website on February 1.
     • This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
   • Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
     • Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
     • This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
   • Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
     • Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
   • HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
     • Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
     • Legislative authority permitting HUD maximum flexibility to establish separate “areas” for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

FHA Announces Policy Changes to Address Risk and Strengthen Finances

New Measures Will Help FHA Better Manage Risk, While Maintaining Support for the Housing Market and Access for Underserved Communities

The count down to the government tax credits only gives 60 days left until a sales contract needs to be completed by April 30th.  Do you have a chance at part of this credit? Have you already bought a house and looking for this tax form from my previous blog? Well, lets take a look at some of the things you need to know that is happening right now in the real estate and mortgage market.

1. New revised tax from so you can clam all these home buying credits, just click here.

2. Condo’s and FHA financing — right now these are like oil and water, but thankfully you are reading this blog. After Feb. 1st FHA changed their guidelines for financing on condo’s. So, this will put some bumps in the road right now, but give it about 6 months and most of the condo projects will be approved for FHA financing if a project goes through this process. Want to know more, just let me know and check out my previous post for these changes. Thankfully some people have come up with a streamline process and it all comes down to who you work with so choose your lender wisely.

3.  March is the end of the first quarter of 2010 and the Treasury will be ending part of the stimulus of buying T-Notes which has been one factor that has been keeping rates low, 1.25 Trillion dollars go a long way. The expected jump in rates from the end of this stimulus range from .50% to 1% jump in rates. Again, there are many other factors that go into determining rates but this is a big factor! This was brought up at my previous post rates will rise 2010.

I hope this information is helpful, especially in this ever changing market. If you had questions about any other topics, let me know.

As always, have a glorious day!