Personal Finance

FHA Mortgage loans- WHEN YOU ALREADY OWN A HOME.

 IMPORTANT – EFFECTIVE WITH CASE NUMBERS PULLED ON OR AFTER 9-19-08

 DID YOU KNOW?

 Recently, FHA and others in the mortgage industry have observed an increasing number of homeowners who have chosen to vacate their existing principal residence and purchase a new residence. This has been occurring as some homeowners, given the rising price of fuel, are relocating to homes nearer their employment, or are taking advantage of other home buying opportunities arising in the marketplace. Due to FHA’s concern that some homebuyers in these transactions may attempt to provide misleading information regarding the rental income of the property being vacated to qualify for the new mortgage, FHA is instituting underwriting guidance designed to assure that the homebuyer can make payments on the full debt service of both mortgages. Consequently, beginning with case number assignments on or after 9-19-08 and until further notice, the underwriting analysis may not consider any rental income from the property being vacated except under circumstances described in this Mortgagee Letter. The exclusion of rental income from property being vacated is being instituted on a temporary basis while FHA further analyzes this situation to determine whether permanent measures may need to be taken. This will assure that a homeowner either has sufficient income to make both mortgage payments without any rental income or has an equity position not likely to result in defaulting on the mortgage on the property being vacated. In either case, this guidance is directed to preventing the practice known as “buy and bail” where the homebuyer purchases, for example, a more affordable dwelling with the intention to cease making payments on the previous mortgage. Although the property being vacated will not have a mortgage insured by FHA, surrounding properties may and, thus, FHA may be indirectly negatively affected should that property result in a foreclosure.

 Exceptions:

Rental income on the property being vacated, reduced by the appropriate vacancy factor may be considered in the underwriting analysis under the following circumstances:

 •Relocations: The homebuyer is relocating with a new employer, or being transferred by the current employer to an area not within reasonable and locally recognized commuting distance. A properly executed lease agreement (i.e., a lease signed by the homebuyer and the lessee) of at least one year’s duration after the loan is closed is required. FHA recommends that underwriters also obtain evidence of the security deposit and/or evidence the first month’s rent was paid to the homeowner.

 •Sufficient Equity in Vacated Property: The homebuyer has a loan-to-value ratio of 75 percent or less, as determined by either a current (no more than six months old) residential appraisal or by comparing the unpaid principal balance to the original sales price of the property. The appraisal, in addition to using forms Fannie Mae1004/Freddie Mac 70, may be an exterior-only appraisal using form Fannie Mae/Freddie Mac 2055, and for condominium units, form Fannie Mae1075/Freddie Mac 466.

Advantages to Using an FHA loan to purchase your next home include:

Florida home buyers should know the many advantages of the FHA mortgage loan programs. FHA home loans  were created to help increase home ownership. For the Florida home buyer the FHA program can simplify the purchase of a home, making financing easier and less expensive than a conventional mortgage loan product. Some highlights of the Florida FHA loan program include:

Minimal Down Payment and Closing costs.

Down payment less than 3% of Sales Price Gifts are allowed Seller can credit up to 6% of sales price towards closing and prepaid costs. 100% Financing available No reserves required. FHA regulated closing costs.

 

Easier Credit Qualifying Guidelines such as:

No minimum FICO score or credit score requirements. FHA will allow a home purchase 1 year after a Bankruptcy. FHA will allow a home purchase2 years after a Foreclosure.

Apply Today at http://www.fhamortgagefhaloan.com/

Many people are taking advantage of lower interest rates and better overall financial packages for their home by refinancing through house and home mortgage refinancing companies.  These types of companies and refinancing companies actually specialize in home refinancing.  Because they specialize they can offer you a better financial contract for your home mortgage.

Before considering refinancing your home, you need to shop around and see what it’s going to cost you.  Stop by your local lender and talk to them about refinancing, and then be sure to hop online and look at the refinancing companies available from your Internet connection.  Shopping online for your house and home mortgage refinancing package is a great way to get the best interest-rate, loan terms, and pay off terms as well.

Before signing on any refinancing contract make sure you thoroughly understand your home mortgage refinancing package.  Many companies may offer you what looks like on the front page, really good terms, but if you don’t read the fine print you may find that there are other fees that can increase this refinancing package quite a bit.  If you don’t understand your mortgage refinancing package, seek out professional help, a small consolation fee can save you thousands of dollars.

If refinancing is not an option to solve your interest rate or financial difficulties in your home mortgage, look to home equity loans, home improvement loans, and other types of home loans.  You might just be surprised how much equity you have built up in your home, and you may be able to take a home equity loan that will cost you less in the long run.

Your credit history is also going to affect your refinancing program.  If you have not been able to make your mortgage payments on a regular basis, there’s a good chance that in order to refinance your house or home, you’re going to pay a higher interest rate.

Also, don’t forget that refinancing will have the loan fees and closing costs.  These can vary from company to company, make sure that you find out and calculate the total cost of the loan at the end of the contract in order to decide which loan packages best.  What may look like the best deal at the beginning, because of fees and closing costs, may not work out that well in the end.

Refinancing your home in order to take advantage of a lower interest rate is a great idea, but if you’re refinancing because of financial trouble, be careful, not only may you lose a good interest rate on your home, but you can wind up in worse financial trouble even after the house and home mortgage refinancing.