Articles Tagged With: Amortization

August 7, 2013

FHA Mortgage Insurance Rules

FHA mortgage insurance rules changed earlier this year–there were a variety of alterations that included a “lifetime of the loan” mortgage insurance premium requirement. Starting in June of 2013, all FHA with case numbers assigned on or after June 3 will be charged annual mortgage insurance premiums “for the maximum duration permitted under statute.” In FHA Mortgagee Letter 2013-04, the new rules state, “For all mortgages regardless of their amortization terms, any mortgage involving an original principal obligation (excluding financed Up-Front MIP (UFMIP)) less than or equal to 90 percent LTV, the annual MIP will be assessed until the end of the mortgage term or for the first 11 years of the mortgage term, whichever occurs first.” Additionally, “For any mortgage involving an original principal obligation (excluding financed UFMIP) with | more...

April 30, 2013

FHA Loan Answers: How Long Is An FHA Loan?

By Joe Wallace

One common FHA loan question is fairly simple and straightforward; how long can an FHA loan be? In general, FHA loans are available for 15 or 30 year terms. FHA loan rules as spelled out in HUD 4155.1 state that there is a maximum loan term–one that depends on the type of transaction and other factors. “The maximum mortgage term may not exceed 30 years from the date that amortization begins. In the case of adjustable rate mortgages (ARMs), the term must be for 30 years. FHA does not require that loan terms be in five year multiples.” FHA loan rules add, “Some programs require a shorter term, including certain streamline refinances made without appraisals.” For FHA Streamline Refinances made without an appraisal, FHA loan rules state, “The streamline refinance | more...

March 27, 2013

FHA Loan Answers: How Long Is An FHA Mortgage?

By Joe Wallace

A common question in any home loan situation is, “How long is my mortgage?” This depends greatly on the type of loan you apply for, the term you agree upon, and how much you pay each month over the lifetime of the loan. In general, FHA mortgages are either 15-year or 30-year loans. The maximum amount of time you can be legally obligated to the original new purchase FHA home loan is 30 years. According to the FHA official site, “The maximum mortgage term may not exceed 30 years from the date that amortization begins. In the case of adjustable rate mortgages (ARMs), the term must be for 30 years. FHA does not require that loan terms be in five year multiples.” Some types of refinancing (certain FHA Streamline Refinances | more...

February 19, 2013

The New FHA MIP Rules

By Joe Wallace

We’ve written more than one blog post recently on the changes to the FHA mortgage insurance policy. Because of the potential for confusion over these changes, we’re attempting to explain these changes one important detail at a time. When the FHA announced its changes and made them official, it issued a mortgagee letter which includes the following information: “For loans with FHA case numbers assigned on or after June 3, 2013, FHA will collect the annual MIP for the maximum duration permitted under statute. For all mortgages regardless of their amortization terms, any mortgage involving an original principal obligation (excluding financed Up-Front MIP (UFMIP)) less than or equal to 90 percent LTV, the annual MIP will be assessed until the end of the mortgage term or for the first 11 | more...

January 15, 2013

FHA Loans For Manufactured Homes: A Reader Question

By Joe Wallace

A reader asks, “My wife, 5 year old and I live in North Carolina with her parents b/c it simply costs too much to rent. Her parents purchased a manufactured home that is over 10 yrs old (1998) 3 years ago as well as the roughly 3/4 acre lot it sits on.” “The house itself does have a permanent foundation (Strapped or bolted to a PIP or masonry perimeter foundation, with no tow gear left in the crawl). They currently still owe significantly on the mortgage. I’ve been looking at the FHA sites out there for information but I haven’t learned an answer to my question. My question is, can my wife and I buy her parents house and land through a manufactured home loan when the house itself is | more...

October 10, 2012

FHA Loan Reader Questions: FHA Loans for Manufactured Homes and Land

By Joe Wallace

A reader asks, “Since FHA loan program includes Manufactured homes what about if you want to have your own land to put the house on. Will the loan cover the home and land?” Here’s a partial answer from the FHA official site: “HUD’s FHA program insures two types of mortgages. Title II insures mortgages on qualifying manufactured homes sold with land and meeting other requirements. FHA’s Title I program can provide information to consumers interested in obtaining HUD-insured loans. You may also want to contact lending institutions in your area (or the area where you want to purchase your home) for additional financing options.” The FHA Title II program mentioned above includes a requirement that the mortgage is intended for “both the manufactured unit and its site”. FHA Title II | more...

June 19, 2012

Can I Buy a HUD Home With an FHA 203(k) Fixer-Upper Loan?

By Joe Wallace

The FHA official site has a special section for buyers interesting in purchasing HUD homes–properties that were once purchased with an FHA guaranteed mortgage but later foreclosed upon and now owned by FHA/HUD. According to the FHA page “About Buying HUD Homes”, these properties are single-family homes with one to four units, offered for sale to “recover the loss on the foreclosure claim.” Anyone can purchase a HUD home; “If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.” Since HUD homes are foreclosed properties, | more...

March 14, 2012

FHA Annual Mortgage Insurance Premium Changes

By Joe Wallace

When the FHA and HUD recently announced a reduction in mortgage insurance premiums for streamline refinancing loans, there was also a reminder of a pending increase to other mortgage insurance premiums. In late 2011, an act was signed into law which results in an increase in annual FHA mortgage insurance premiums for non-streamline FHA loans. According to FHA Mortgagee Letter 12-4, “On December 23, 2011, the President signed into law the Temporary Payroll Tax Cut Continuation Act of 2011 (Public Law 112-78), which requires FHA to increase the Annual MIP it collects by 10 basis points”. This change is for FHA loans with case numbers assigned on or after April 9, 2012. Borrowers who get FHA loan case numbers before this date would pay the mortgage insurance premiums current for | more...

January 2, 2012

Reader Question: FHA Up Front Mortgage Insurance Premiums

By Joe Wallace

A reader question about FHA mortgage insurance premiums came in over the weekend, asking about how the FHA calculates MIP. The reader asks, “Is there some way to calculate how much the FHA insurance will cost based on the price of the home?” The technical answer to this question is that there’s no way to base the FHA Mortgage Insurance Premium on the price of the home alone–the loan amount (more specifically, the loan-to-value percentage) is used to determine the MIP, and the loan amount could include other items such as permissible closing costs, etc. That aside, when it comes to how to calculate the MIP, there’s more than one answer because of the nature of FHA mortgage insurance premiums. The FHA loan Up Front Mortgage Insurance Premium, or UPMIP, | more...

September 27, 2011

FHA Clarifies Rules on Annual Mortgage Insurance Premiums For Loans 15 Years Or Less

By Joe Wallace

The FHA has issued clarification on FHA insured mortgages with terms of 15 years or less and a Loan To Value Ratio of less than 78 percent or less. FHA loans with case numbers assigned on or after April 18, 2011 are affected by this clarification, which refers to the cancellation of the annual mortgage insurance premium or MIP. Earlier in 2011, the FHA issued Mortgagee Letter 2011-10 which clarified and updated FHA loan rules for MIP for affected FHA loan types. When it was issued, it did not address “forward” loans with terms 15 years or less as described above. According to the FHA, “Currently the annual MIP is canceled for mortgages with amortization terms of 15 years or less when the LTV reaches 78 percent.” FHA Mortgagee Letter | more...