Coronavirus-FHA 680 FICO

Things are moving so quickly in the market with the coronavirus being at the forefront, everyone is feeling hardship across the board.

FHA Loans provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories.  It is one of the largest insurers of mortgages in the world, insuring more than 46 million mortgages since its inception in 1934 and it's the only government agency that operates from its self-generated income.

Self-generated income which means the Mortgage insurance premiums that is collected from borrowers via lenders are used to operate the program.

FICO scores tells the lender what type of credit risk you are and what your interest rate should be to reflect that risk by utilizing a FICO formula.

The most commonalty used :

Equifax Beacon 5.0

Experian/Fair Isaac Risk Model v2

TransUnion FICO Risk Score 04

We’re seeing what’s “good” for rates can be bad for lenders, and what’s “good” for the market can be bad for home buyers. This tug of war has caused servicers to implement drastic measures to keep up; includes raising the minimum FICO.  If you have questions or concerns please contact your lender right away.

The Analytics on Appraisals

The Analytics on Appraisals

What is an Appraisal?

An appraisal is a document provided by an appraiser (the person who conducts the appraisal report) that provides a professional estimate of the value of your home.

Appraisals are conducted by a third-party appraiser who is completely objective in their process. Appraisers do not work in favor of the lender nor the borrower. They simply conduct the appraisal and produce their findings.

Appraisals are most often conducted two ways. The first way an appraiser can conduct an appraisal is by noting comparables. Comparables, or comps for short, are properties within the neighborhood of the home you’re buying that are similar to yours. The appraiser will use the values of the similar properties nearby to determine the value of your home. The second way is by estimating how much it would cost to replace your home should it burn down or be otherwise destroyed. The appraisal will compile all of the findings of the appraiser including:

Why Lenders Need Appraisals

Lenders do not want to dish out more than the actual market value of the subject property. An appraiser’s goal is to determine that value. With this figure, the lender knows how much the property will sell for if you default on your loan. They also know how much they can lend to you without taking a loss if you default.

For example: If the subject property is appraised at $150,000 – that’s how much it will sell for on the open market. If your lender gives you a loan of $175,000 and you default on your loan, they now have to try to sell the home at a higher amount than what its appraised for, which can be difficult. If they end up selling the home for the actual market value, they’ve just lost $25,000. It is for this reason that lenders usually give a loan amount that is at or under the appraised value.

Why Borrower’s Need Appraisals

Appraisals are usually buyer paid and can be paid for at closing or during the application process. If you’ve signed a contract to buy a new home for $200,000 and the appraisal comes back valuing the home at $150,000, you should negotiate with your lender to lower the loan amount because you’re paying more for the home than it’s actually worth.

Overall, appraisals are a measure of protection. They ensure that neither party is lending or spending too much during the purchase process of a home.

 

 

 

 

 

 

 

When doing your research, always be sure to cite great sources! Check out the sources for this article below!

 

http://www.bankrate.com/finance/real-estate/why-does-the-house-need-an-appraisal.aspx

https://www.thebalance.com/mortgage-101-series-understanding-the-appraisal-process-2395231

https://www.thebalance.com/facts-about-residential-real-estate-appraisals-1797691

https://www.thebalance.com/appraisal-process-when-buying-a-home-2395235

 

WHITNEY RUSH, VALLEY WEST MORTGAGE

 

 

FHA BRINGS IN THE NEW YEAR WITH MIP CUTS FOR BORROWERS!

FHA BRINGS IN THE NEW YEAR WITH MIP CUTS FOR BORROWERS!

The Federal Housing Administration, also known as the FHA, has decided to bless borrowers this year by cutting mortgage insurance premiums. Who is the Federal Housing Administration? The Federal Housing Administration, simply called the FHA, is the government body that sets standards for the processing of mortgage loans. Most notably, the FHA insures loans made by banks that have been FHA approved. The Mutual Mortgage Insurance Fund created and backed by the FHA has grown exponentially in the past four years under the Obama Administration. This means that the FHA now has the flex room it needs to provide an opportunity for savings for deserving and responsible borrowers.

What does cutting Mortgage Insurance Premiums mean for our borrowers?

The cut in MIP (Mortgage Insurance Premiums) will apply to FHA loans with a closing or disbursement date on or after January 27, 2017. The FHA cut in Mortgage Insurance Premiums is going to do wonders for the borrowers who have to deal with this new environment of rising interest rates. The FHA is predicting that homeowners will be able to save an average of $500 per year. The cut in Mortgage Insurance Premiums means that the cost of housing will decrease and the opportunity for mortgage credit availability will meaningfully expand. In a nutshell, more borrowers will have the opportunity to take out FHA loans because the cost of obtaining an FHA loan is being reduced.

What does cutting Mortgage Insurance Premiums mean for Valley West Mortgage?

We love originating loans for our borrowers at Valley West Mortgage. We (as your lender) bear risk every time we lend money to homeowners. To offset that risk, borrowers pay a Mortgage Insurance Premium at closing as well as an annual mortgage insurance premium that is a small percentage of the loan amount. That premium paid by the borrower then goes toward the Mutual Mortgage Insurance Fund, an account that will pay back the lender if the mortgager falls on hard times and defaults on their loan. Mortgage Insurance Premiums being cut by the FHA means that we will be able to originate even more FHA loans for our borrowers because the required premium at closing will be of a smaller amount than it has been in the past.

Let’s Recap

The Federal Housing Administration or FHA, charges a small percentage of your loan amount to insure your loan against a default. This small percentage that is paid once at closing, and once annually is called your Mortgage Insurance Premium or MIP. The MIP is a part of the cost of your loan. When the cost of the mortgage insurance premium is cut, it allows more borrowers to meet the debt to income ratio that is required to take out an FHA loan. Borrowers that may not have been eligible to meet the standards before now have a chance to enter into the homeowners world. Lenders for whom business may have been slow as a result of rising interest rates will now be happily overflowed with business from borrowers who are looking to take advantage of this remarkable opportunity.

 

When doing your research, always use great sources! Check out the sources for this article below.
http://www.housingwire.com/articles/38905-housing-industry-welcomes-fha-mortgage-insurance-premium-cut
https://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/fhahistory
http://www.investopedia.com/terms/m/mutual-mortgage-insurance-fund.asp
http://www.housingwire.com/articles/38902-fha-cuts-mortgage-insurance-premiums-again

 

- WHITNEY RUSH, VALLEY WEST MORTGAGE  

When is the right time to finance a home?

The time to finance a home for the best rate could be now, as mortgage rates across the country have reached a low over the last 16 months at 4.12 percent, according to Freddie Mac.

This number is quoted for a 30-year fixed rate conventional mortgage, and since Jan. 1, people have been finding themselves able to afford about 8 percent more of a home in terms of quality. Las Vegas, in particular, may be experiencing their home rates flattening out as the median home price reached $200,000 in August, which is an almost 10 percent increase from the same time last year, according to a recent report from the Greater Las Vegas Association of Realtors (GLVAR). This is good news for home owners and buyers as the economy continues to recover from the recession that severely impacted the value of property nationwide.

Although property values increase as pricing begins to level, low mortgage rates are not necessarily available to everyone. Those who will see the lowest rates would be considered prime lenders, defined by Freddie Mac as a lender with a credit score over 740 and who can offer a 20 percent down payment. This, however, should not discourage those from financing a home.

If you’re interested in mortgage rates in the greater Las Vegas area, please contact Valley West Mortgage at 702-696-9900 or info@valleywestmortgage.com

Qualifying for an FHA or VA loan date extended.

Great news to anyone interested in qualifying for an FHA or VA loan. President Barack Obama that reinstates the higher loan limits until December 31st, 2013. The president did not provide his extension to the Power Houses known as Fannie Mae and Freddie Mac.

FHA and GSE maximum has been at $625,500 since October 1, 2008. Under the restored limits the highest FHA loan available in designated high cost areas will be $729,750. "Loans written between October 1 and today's effective date of the new legislation will not be eligible for the new limits. Limits on VA loans will return to the levels established under the Veterans Benefits Improvement Act of 2008 which are, in some cases, higher than FHA limits", according to a recent post by Mortgage News Daily.

Mortgage Rates Are on the Rise!

We said it would happen and soon. Average rates have just passed 5%

What we don't know is how far or how fast this Mortgage Rate rise will be. Recent positive indicators for the economy have caused rates to rise. Mortgage Rates parallel Long-Terms Bond Rates and those always rise on positive economic news. It is more important than ever to have your Refinance or Purchase file in the hands of a competent Mortgage Professional! At Valley West Mortgage, we keep a very close watch on rates for our clients. While rates are clearly on the rise, they still have their ups and downs. We watch all of the rate change indicators for potential changes so we can lock rates at the best possible advantage for our clients.

The key to being ready to lock is having a complete file which is ready in every respect. With our clients help, and help from our Realtors on Puchase files, we do everything within our control to make sure that your file is complete, as quickly as possible. In this way, we won't miss any opportunity to secure the best terms possible! Give us a call today so we can help you to succeed even in this unstable market. Remember, Las Vegas is still one of the best buying opportunities in the entire country regardless of current rate fluctuations.

Call (702) 696-9900 or (888) 931-0007 and let Valley West Mortgage get you ready to close!

It Really is Better to Buy than Rent in Las Vegas!

On the upside...

A study was published today by Trulia, a major Real Estate watch site, and Las Vegas is #2 behind only Miami as the best place to buy rather than rent. I'm sure that this will be on most of our Local News stations by this evening. They love to cover the latest Las Vegas Real Estate news.

As we have said before, this is the best opportunity in years to buy a home in Las Vegas! Currently, rates have been fluctuating quite a bit due to market uncertainty. For the past two weeks, rates have finished slightly highger. Don't wait for home prices to "drop a little more" and then find yourself out of position because rates have gone up too much.

Call our professional staff and get the ball rolling today! That way, you will already have provided everything needed in order for us to lock your rate as soon as you have an accepted offer on a property.

Call (702) 696-9900 or (888) 931-0007 and let Valley West Mortgage get you ready to close!

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FHA - Mortgage Insurance Premium Update...

Implementation of the new plan is delayed until October 1st.

After announcing last week that it was lowering upfront insurance premiums
from 2.25% to 1.0% on Sept. 7, the Federal Housing Administration said it’s pushing back implementation until October.
“Based on industry feedback and our desire to have this change implemented successfully in the marketplace, FHA will make the premium fee changes on all new case numbers effective October 4, 2010,” said Vicki Bott, Deputy Assistant Secretary for the Housing and Urban Development.

For details on the upcoming changes, see our earlier post, "Congress has passed H.R. 5981 – FHA Mortgage Insurance Changes…" Posted on August 5th, 2010

Congress has passed H.R. 5981 - FHA Mortgage Insurance Changes...

This bill gives FHA the authority to adjust its annual mortgage insurance premiums.

While there is both good news and bad news for FHA mortgage applicants, this premium restructuring will help to keep FHA stable in the long run. The up-front mortgage insurance has been lowered considerably. This will mean a smaller bite out of consumer wallets in order to close the loan they have applied for. With todays stricter underwriting to qualify, there is less risk of default by new mortgage holders so this move makes sense. Now for the trade-off...

On the other side of the equation, the cost of the monthly amount of mortgage insurance will increase. This could be interpreted as FHA reserves being replenished at a slower rate than before passage of this bill. With the more stable underwriting lowering the risks, consumers can save some of that money that was needed just to close their loan. You will still end up spending that money but, it will be as a slightly higher monthly payment amount. While this is a fair trade off for many, some folks who are right at the limit for the maximum monthly payment they can qualify for, will have to find a way to lower their loan amount to offset the impact of the higher monthly mortgage insurance premium. This change will be effective for all FHA loan applications started on or after September 7th, 2010. While President Obama has not officially signed the bill into law, no veto is expected.

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