Tag: federal housing administration

Buy A House with a Small Down Payment

If you are a first-time homebuyer, getting a mortgage may seem overwhelming — especially with all the different options available. Maybe you don’t have a lot of money for a down payment or your credit isn’t great. The good news is, you can still qualify for a home loan. Here are 4 low or no down payment options that can help you, as a first-time homebuyer, get into the house of your dreams.

FHA Loan

With an FHA loan, all you need is a 3.5% minimum down payment to buy your first home. Because the Federal Housing Administration backs the FHA loan, the qualifications are a bit more lenient. People who have no established credit or small savings for a down payment, and even a credit score as low as 580 can qualify. The FHA loan is also available to immigrants who have a Visa or Green Card, as well as those who have gaps in their employment.

It’s also easier to qualify for an FHA loan if you’ve filed for bankruptcy. With a conventional loan, you have to wait four years after filing Chapter 7 to apply for a mortgage. With the FHA loan, you only have to wait two years. If you filed for Chapter 13, you only have to wait one year. You can also get an FHA loan three years after being foreclosed on your previous property.

VA Loan

The government created the VA loan to provide home ownership to veterans and military personnel. Like the FHA loan, the government backs the VA loan for extra security, so qualifying is easier. To qualify, you must get a certificate of eligibility from the Veterans Administration. Having bad credit may not hinder you from getting approved. VA loans require no down payment or Private Mortgage Insurance (PMI). Veterans can choose either a 30-year fixed VA loan or a 15-year fixed VA loan for up to $424,100. They may also get a cash-out refinance of up to 100% of their home.

USDA Rural Development Loan

For those wishing to buy a home in a rural area, the USDA Rural Development Loan requires zero down payment, making it great for first-time home buyers. The government also backs this loan for added security, so there’s low or no PMI attached to it. You only have to pay a 1% guarantee fee upfront and 0.5% each year after that. That’s less than the 1.75% up front and 0.85% each year with the FHA loan. If you’ve recently filed for bankruptcy or were foreclosed, you won’t have to wait too long to qualify for a USDA loan.

Conventional 1% Down Mortgage

Important Update! Last date for loan submissions is 5/31/2018. Program is being discontinued.

Riverbank Finance offers homebuyers a way to put only 1% down on a home and still get a conventional mortgage. In this case, the home buyer puts 1% down and the lender (Riverbank Finance) contributes 2%, giving home buyer 3% equity when closing on the home. Freddie Mac created this option to make homes more affordable for new buyers. It allows people to buy a new home for, essentially, the cost of one month’s rent and avoid PMI altogether or drop PMI in the future. Your 1% down payment may be a gift from someone, you must have at least a 700 FICO score, and your debt-to-income (DTI) ratio is limited to 43%.

For more information or to speak with a loan officer about any of these mortgage options, call Riverbank Finance at (800) 555-2098.

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FHA Lowers Mortgage Insurance Premium

FHA Lowers Mortgage Insurance Premium

Great news for homebuyers considering an FHA home loan or FHA refinance! The popular mortgage program is getting even better. The Department of Housing & Urban Development announced this morning that the FHA will be decreasing their annual mortgage insurance premium by a quarter of a percent. The upfront guarantee fee will remain the same.

Effective for new mortgages closing on or after January 27th, the annual fee—paid monthly—will decrease from .85% to .60%. This news comes only four months after the USDA decision to lower their own upfront and annual fees on rural development loans.

New FHA MIP Savings Example

Now, unless you spend your spare time studying loan program guidelines, that might sound like gibberish—so let’s do some math to demonstrate the savings. On a $200,000 home purchase, the monthly mortgage insurance premium would decrease from $142 to $100. That is a savings of $42 per month, over $500 per year!

The FHA made this decision following four straight years of growth and $44 billion dollars of value gained since 2012. They aim to protect the insurance fund while also offsetting the cost of increased mortgage interest rates.

“After four straight years of growth and with sufficient reserves on hand to meet future claims, its time for FHA to pass along some modest savings to working families” -HUD Secretary, Julian Castro

Requirements for an FHA loan

You might be thinking, that’s great, but how do I know if an FHA loan is the right fit for me? I’m glad you asked! Qualifying for an FHA loan is relatively simple and provides many benefits, including but not limited to:

  • Minimum credit score of 580
  • Down Payment as low as 3.5%
  • No early payoff penalties
  • Allows seller-paid closing costs

FHA announcement: Read FHA Mortgagee

Have a specific scenario you’d like to run past us? Give us a call to speak with one of our licensed loan officers, or check out our FHA Mortgage Calculator. We would love to recommend the best loan program for you and your situation.

Apply for a FHA Mortgage

Call Riverbank Finance today at 1-800-555-2098

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Conforming Loan Limits Increased

As home prices across the country continue to rise, the Federal Housing Finance Agency (FHFA) and the Federal Housing Administration (FHA) have announced increases in conforming loan limits for 2017.

For the first time since 2006, the FHFA has increased the maximum loan limit for conventional loans through Fannie Mae and Freddie Mac from $417,000 to $424,100.

Related: 2019 Conventional Loan Limits in Michigan

Conventional Loan Limits Increased

Conforming loan limits for Fannie and Freddie are determined by the Housing & Economic Recovery Act of 2008, which requires that after a period of declining home prices, the baseline loan limit may not rise until home prices return to pre-decline levels. Until this year, average home prices remained below the level of those in the third quarter of 2007—considered the pre-decline price level—so the baseline remained the same. According to the FHFA, the Home Price Index (HPI) value for the third quarter of 2016 was approximately 1.7% above the value for the third quarter of 2007, meaning the baseline loan limit will increase as such.

Related: More about Conventional Mortgage Loan Limits and FHA Mortgage Loan Limits

FHA Loan Limits Increased

Less than a week later, the FHA announced a similar loan limit increase for a whopping 2,948 U.S. counties in 2017. Only 286 counties will remain at 2016 levels. Here in Michigan, the FHA conforming loan limit will rise from $271,050 to $275,665. It will apply to cases assigned on or after January 1st, 2017.

These loan limit increases may seem marginal, but point to a better future. The FHFA and FHA recognize that home values across the nation have recovered, and have responded with an opportunity for homebuyers to increase their buying power.

Some financial institutions have speculated that this 1.7%, $10,000 increase to the conventional loan limit could lead to 40,000 additional originations with $20 billion in loan balances across the country.

Related: One Percent Down Conventional Loan

2017 Loan Limit Summary

  • FHA Conforming Loan Limit $275,665
  • Conventional Conforming Loan Limit $424,100
  • USDA Conforming Loan Limit $424,100
  • VA Conforming Loan Limit $424,100 with zero down payment

Have a specific scenario you’d like to run past us? Give us a call to speak with one of our licensed loan officers. We would love to recommend the best loan program for you and your situation.

Get More Information

To apply for a Mortgage or Refinance call Riverbank Finance today at 1-800-555-2098.

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TIME IS RUNNING OUT ON REDUCED MORTGAGE INSURANCE PREMIUMS

No April fools!  FHA MIP going up April 1st!

FHA loan are becoming more popular as families deal with the after effects of the major economic depression that we saw only a few years ago.  With conventional mortgage being more difficult to qualify for with previous credit issue, FHA has become the go to mortgage program for U.S. Families.

The Federal Housing Administration has experienced high delinquency rates throughout the past couple of years also. With the uptick in foreclosures and partial claim premiums from buyers not able to pay their payments on time, the administration is forced to again raise mortgage insurance premiums.

Related: FHA MORTGAGE INSURANCE PREMIUMS GOING UP SOON!

FHA Mortgage Insurance Premium Increases

The Federal Housing Administration (FHA) does not offer financing directly. Their role in mortgage lending is to insure private companies against losses. When a bank or mortgage company offer FHA financing they are using the administrations underwriting guidelines to pre-qualify and approve clients. If the borrower qualifies under such guidelines then the FHA will insure the lender against losses.

With billions of dollars of mortgage loans insured the FHA has a large responsibility to remain solvent and protect itself against future losses therefore it has an account called the Mutual Mortgage Insurance (MMI) fund.  This fund is regulated by law and the FHA is required to maintain a 2% minimum reserve.

The FHA has dropped below their minimum requirements therefore they turn to new borrowers to cough up the coins to replenish it.  The Federal Housing Administration has announced that it will be increasing Mortgage Insurance Premiums in the near future.

2013 Mortgage Insurance Premiums for FHA Loans

Starting April 1st, 2013, FHA mortgage insurance premiums (MIP) will increase 10 basis points annually of .10 percentage points. This increase in premiums will apply to all FHA loan terms including the 15-year-fixed-rate FHA loans.

FHA Streamline Refinance MIP

If your current loan is an FHA loan in which you took out prior to June 1st, 2009 then you may be in luck. The administration has allowed a lower premium amount for homeowners refinancing to lower their payments through a FHA streamline refinance mortgage.

FHA Streamline Refinance Mortgage insurance premiums will remain at.55 basis points or .0055 percentage points annually. The added bonus is that the up-front mortgage insurance premium will be only .01 basis points or .0001 percentage points.

Updates for Cancelling FHA Mortgage Insurance Premiums

Starting June 3rd, 2013 the FHA has announced that it will no longer allow MIP cancellation if the loan balance is higher than 90% of the home’s appraised value (>90% LTV). Currently homeowners are able to request cancellation of their monthly mortgage insurance once their loan balance reaches 78 percent of the home’s original appraised value when the loan was taken out.

For those homeowners whom are disciplined enough to have a 10% down payment and start of at 90% LTV or less, the mortgage insurance will continue for a minimum of 11 years.  This chance starts mid-2013 and will have sweeping effects to the mortgage industry

How to Apply for an FHA mortgage

Despite the additional mortgage insurance premiums , FHA mortgage loans may still be the best option for a home purchase or refinance.  Conventional loans still require a minimum of 7 years to have passed after a foreclosures while FHA may allow only 3 years after the sale date.  This factor alone still has clients flocking towards FHA loans.

To check your FHA eligibility, and how the agency’s new rules may affect your finances, get started with a rate quote online or by calling the mortgage experts at Riverbank Finance today. If you get started before the April 1, 2013 deadline, you’ll be “grandfathered” in to the current, lower MIP rates.

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FHA MORTGAGE INSURANCE PREMIUMS TO GO UP APRIL 1ST!

FHA mortgage insurance premiums risingUnfortunately, FHA has recently announced some change to the FHA mortgage insurance premiums for all new FHA loans starting April 1, 2013.  It just seems as if FHA continues to raise the mortgage insurance premiums to try to get it back in line so the program remains self funding.  Unfortunately, the reason behind these changes are because current homeowners are defaulting on their payment and not paying their FHA premiums that are already due.  FHA will continually keep checking the overall strength of this great program.  Starting April 1st homeowners will pay 1.55% for all upfront mortgage insurance.

Streamline your FHA loan to reduced premiums amounts if you obtained your mortgage prior to  June 1, 2009

One thing that is not going up is the FHA streamline refinance loans as long as you loan originated before June 1st 2009.  If your FHA loan originated prior to June 1st 2009 you will get a break on your mortgage insurance premiums.

Here is a chart which helps explain the mortgage insurance premiums:

  • 15-year fixed rate mortgage with LTV of 78% or less: No annual MIP required.
  • 15-year fixed rate mortgage with LTV greater than 78%: .55% annual MIP
  • 30- year fixed rate mortgage, all LTVs: .55% annual MIP

It’s time to beat the April 1st deadline

If your loan is already in process the chances are good that you will be lovked into the old FHA mortgage insurance premiums.  It is very important to hurry up and beat these changes so you will not need to spend out unnecessary money which could be avoided.  Contact Riverbank Finance today to lock in your FHA loan or FHA Streamline Refinance MIP before the premiums change!

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FHA Streamline Refinance Premiums Dropping

Lower FHA PremiumsThere was a bit of speculation recently after an announcement from the Federal Housing Administration (FHA) stated their insurance premiums would be rising.  The speculation was that premiums regarding the FHA Streamline Refinance program would be dropping.  Well it seems that is the case.  Homeowners with mortgages backed by the FHA will now face premium fees that are roughly half of what they previously were.

Every step, even if they’re baby steps, made towards fixing the housing market is a good one.  Reducing the premiums is the right thing to do in order to attract homeowners who are still in “underwater” situations.

The FHA has released the exact numbers so here is what you can expect.  The upfront insurance premiums borrowers face will be reduced from 1% to .01% of the overall loan balance.  Beyond that, annual premiums will drop from 1.15% to 0.55% of the overall loan balance.  Now there is one little catch that has been implemented, these changes are only viable for those borrowers who took out their loans BEFORE June 1, 2009.  That deadline is definitely a big downside to this change, a downside for both the FHA and for homeowners as the FHA has backed a large amount or mortgages AFTER that date.

You would think that homeowners would be chomping at the bit to refinance and save themselves some cash but there are still plenty out there that are still resistant to do-so. According to the White House, the potential number of homeowners this mortgage program ALONE could help, is 2-to-3 million.

That averages out to near 60,000 homeowners in every state that could benefit from an FHA Streamline Refinance.  Meaning, there are 60,000 people in Michigan that we could help save a pretty penny and all that is needed is a quick call to one of our loan-officers at 1-800-555-2098 to get started on your refinancing!

Mortgage refinance questions?

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Changes Coming to FHA Premiums

Changes to FHA PremiumsYou know those nasty premiums that come along with mortgage loans?  Those ones that everyone hates to deal with.  Yeah, well I think you’re about to hate FHA (Federal Housing Administration) premiums even more.  FHA Acting Commissioner, Carol Galante, made an announcement regarding their current premium points.  It appears the “basis” points” will soon be on the rise.

READ FOR UPDATES: 2013 FHA MORTGAGE INSURANCE

The change to the FHA insurance premiums will officially be enacted as of April 1, 2012.  That is definitely something none of like to hear.  Now even though the exact details have yet to be released in regards to the insurance premiums, it is certain that premiums on “forward” mortgages will raise 10 “basis points.” While jumbo loans will see an increase of 25 “basis points.”

It’s not all bad news though when it comes down to premiums with the Federal Housing Administration.  If you haven’t heard of the FHA Streamline Refinance program, you’re really missing out on a great opportunity to refinance.  FHA Streamline Refinance was created to allow homeowners with loans owned or guaranteed by the FHA to refinance with today’s record low mortgage rates.  Well in regards to premiums, experts are expecting the premiums of the FHA Streamline Refinance program will drop in the near future.

Be sure to stay up-to-date with all of the latest real estate and mortgage-based news by checking out our blog.  Now if you’re interested in refinancing your Michigan property under FHA Streamline Refinance or another mortgage program like HARP, just give our certified loan-officers at Riverbank Finance in Grand Rapids, Michigan a call at 1-800-555-2098.

Michigan FHA Streamline Refinance

FHA Streamline Refinance in MichiganOwing more on your mortgage than your house is worth is a common problem in Michigan.  After the economy took a downturn only a few years back, property values have plummeted.  The U.S. federal government has recently announced programs to help people refinance their mortgages that are owned by Fannie Mae and Freddie Mac.  This is great news for many homeowners, however that still leaves millions of homeowners that may not qualify for a HARP refinance because their mortgage loans are insured by the Federal Housing Administration through an FHA loan.

Before you give up all hope, there is a program that is a solution to underwater homes in Michigan. If you are currently in an FHA mortgage then you may qualify for a FHA Streamline Refinance with no appraisal.  FHA’s streamline refinance program will allow Michigan homeowners to refinance to today’s historically low mortgage rates while also drastically reducing the steps needed to qualify.

When it comes to qualifying for the FHA Streamline Refinance, you have to be up-to-date on all mortgage payments for the past year.  This means that you must have paid all your mortgage payments on time for the past 12 months with no 30 day late pays.  You also have to be sure you’re the original property owner for the last six-months, minimum, to take advantage of the program.  The next step is to call Riverbank Finance, a mortgage company in Michigan, so a loan officer can help give you your options to for FHA streamlines mortgage rates.

Benefits of a Michigan FHA streamline Refinance

There are several great benefits to the streamline program including the amount of paperwork needed is miniscule.  The closing costs and fees for this type of refinance are very low, in fact there are zero cost loan options available for most situations.  Many programs involve application fees but that’s nothing to worry about, as applications fees are waived.  Another great benefit is there is no appraisal required therefore the value of your home is not an important factor.

When you take advantage of an FHA Streamline Refinance, you can expect to receive as very low to zero-cost loan options!  No matter where your property is within the state of Michigan, we can help you benefit from an FHA Streamline Refinance. Call Riverbank Finance today at 1-800-555-2098 to begin your refinancing process to see if you can save thousands in interest.

For more information on a FHA Streamline Refinance, request information below, or visit: http://riverbankfinance.com/mortgage-programs/streamline-fha-mortgage.html

FHA Streamline information?

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FHA Streamline Refinance no appraisal in Michigan

Michigan Streamline RefinancePresident Obama recently announced that a comprehensive package that will be placed which houses administrative actions and legislative proposals in order to help homeowners.  This is all in an attempt to support middle class families while also giving a boost to the economy.  We’ve got the facts regarding this housing market package in case you’re interested in taking a look.

Both HUD and the Federal Housing Administration (FHA) have been committed supporters of the Obama Administration’s efforts towards improving both the housing market and economy.  One great tool that homeowners can take advantage of is the FHA Streamline Refinance.

The FHA Streamline Refinance tool allows for borrowers to refinance on today’s low rates without any additional underwriting.  As long as those same borrowers are current on their mortgage payments, they can refinance into a brand new FHA-insured loan.

There are lenders out there that have been quite reluctant to provide FHA Streamline Refinance’s as they are worried of taking on a loan that has not been underwritten.  Not to mention the possible negative effect these loans may have on a lender’s FHA Compare Ratio.  The Federal Housing Administration has luckily caught wind of these concerns form lenders and changes are now being made.  First, FHA Streamline Refinance loans will NO LONGER appear in the Neighborhood Watch Early Warning System.  You can expect to see the Streamline Refinances to disappear from the Neighborhood Watch public compare ratio.

With the Federal Housing Administration instituting these changes, lenders should be expected to finally go along with FHA Streamline Refinances allowing homeowners to finally take complete advantage of today’s low rates without having to deal with the additional process of underwriting.

If you’re looking to take advantage of the FHA Streamline Refinance program in Michigan with NO appraisal.  Then feel free to contact Riverbank Finance by calling 1-800-555-2098.  If you would like to be contacted via email, just fill out the form below.

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