Articles Tagged With: APR (Annual Percentage Rate)

April 16, 2015

FHA Mortgage Rate Trends–Mostly Improving Since 9 April

On April 9, 2015, mortgage rates moved higher than they had been all month–not saying much since the month was only nine days old, to be sure. But since that time, rates have improved. There have been some ups and downs (yesterday mortgage rates experienced some weakness depending on the lender, but overall in the last four business days we’ve seen improvements.) but overall we’re still seeing rates holding at or near levels we reported last time. 30-year fixed rate conventional mortgages have been, at the time of this writing, at or near 3.625% (best execution), but in a range that tops out at 3.75% (again, best execution and depending on the lender). FHA mortgage loan rates are holding in a comfort zone between 3.25% and 3.5% best execution. Until | more...

April 14, 2015

FHA Home Loans, Mortgage Debt Cancellation, And Tax Time

By Joe Wallace

April 15th, the tax deadline, is very near, but many people choose to apply to get an extension so they can file their taxes later in the year. If you haven’t completed your taxes for 2014 and are considering an extension, there is some very helpful information about home loans, home loan debt and related issues that may affect those who have FHA home loans or refinance loans. One important issue many borrowers have had to face in recent years is the tax consequences from a home loan modification or similar alteration to a mortgage where part of the debt is forgiven, cancelled, or written off by the lender. What follows is not tax advice, we are simply quoting what’s printed on the IRS official site. If you have tax | more...

April 9, 2015

FHA Cash-Out Refinance Loans: A Reader Question

By Joe Wallace

A reader asks, “Our home is in trust, and my mother-in-law has signed a quit claim deed. My husband was in a hit and run motorcycle accident 3 years ago this coming June. Due to his inability to work for 4 months we struggled with payments and our credit is horrible. We would like to get a loan on our house so we can pay off a home equity loan, and multiple collections.” “Our home is valued at approx. $250,000, and we would like to get a loan for half of that so we can get out of debt and make some improvements to our home. My husband has credit scores of Experian 558, Equifax 517, and Transunion 491. Is it possible to find an FHA lender that would be | more...

March 25, 2015

Significant Changes In Borrower Financial Status: An FHA Loan Question

By Joe Wallace

A reader asks, “I am in the process of buying a new home which is scheduled to be closing is by April 30th.My loan processor had just asked me last week to write a letter explaining why there is a significant overdraft fees on my checking account?. i am worried. please advise.” In the same way that borrowers are advised not to apply for new lines of credit leading up to a home loan application, they are also urged to maintain a record of steady, on-time payments until loan approval. The reason for this is simple–the lender is required to document and make loan approval decisions based on any “significant changes” to a borrower’s financial position. A home loan is a major financial commitment and a borrower who has significant | more...

March 18, 2015

FHA Mortgage Rate Trends: Large One-Day Drop In Best Execution Rates

By Joe Wallace

On Wednesday mortgage loan rates in general saw a significant drop in the wake of a highly anticipated Fed announcement, which included words some have taken to mean there will be no interest rate increase in the month of April. Some sources are labeling today’s downward move as “the best day of 2015” based on that drop; 30-year fixed rate conventional loan best execution rates are for some extremely well-qualified borrowers coming in at 3.75%, best execution. Borrowers who “floated” into the Fed announcement today were, by all accounts, given a good payoff. That said, those who floated are now being encouraged by many industry professionals to lock, as there is no guarantee that today’s sharp improvement in best execution rates will continue tomorrow or the next day. The lenders | more...

October 7, 2014

FHA Loan MIP Rules: A Reader Question

By Joe Wallace

A reader asks, “We acquired FHA loan last April 2010 and refinanced it twice. Our original loan was 410k and our current bal is 383k. How can we eliminate the MIP and loan APR is 3.25%.” Last year, FHA Mortgagee Letter 2013-04 announced changes to FHA loan policy for mortgage insurance premiums. That policy was altered to require MIP payments for the maximum duration allowed by law on FHA loans. According to the FHA official site: “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. See 12 U.S.C. § 1709(c)(2)(B).” “For all mortgages regardless of their amortization terms, any mortgage involving an original principal obligation (excluding financed Up-Front MIP (UFMIP) less than or | more...

July 25, 2014

Missing Payments On FHA Loans Prior To Refinancing

By Joe Wallace

One common question about FHA refinance loans involves skipping payments. The ability to skip a payment prior to getting a refinance loan seems like an attractive option to many borrowers, and for those who have become delinquent on home loans. But does the FHA allow skipping payments? How do FHA loan rules address delinquent accounts that are being refinanced? HUD 4155.1 Chapter Three addresses these issues in general, stating: “The borrower must be current on the loan being refinanced for the month due prior to the month in which he/she closes the refinancing, and for the month in which he/she closes.” To clarify, Chapter Three, Section A of HUD 4155.1 provides the following example for us to review: “If the borrower is closing on April 8, he/she must have made | more...

June 10, 2014

FHA Refinance Loan Rules For Payments Before and After The New Loan

By Joe Wallace

FHA refinance loan advice includes a variety of recommendations about creditworthiness. For example, you should make sure you have 12 months of on-time payments on your credit record before you apply for a refinance loan, especially when applying for cash-out refinancing loans. But what about the timeliness of your original mortgage payments? Borrowers who have made all their payments on time and are about to refinance may wonder if, because of the timing of an FHA refinance transaction, two payments might be required in a single month. Can’t the borrower skip the final payment on the old mortgage before the new one kicks in? The rules for refinance loans found in HUD 4155.1 Chapter Three instruct the lender to make sure the borrower is current and paid up all the | more...

April 4, 2014

FHA Loan Reader Questions: FHA Mortgage Loan Interest Rates

By Joe Wallace

A reader asks, “Is there a current guideline for the expected interest rate under the short refi for a home 450k to 500k. My note holder indicated approx 5% interest, 6.5 APR which seems a little high given the current rates for Jumbos.” “Also, for those interested should note my Tax Rep indicated the “forgiven debt” is no longer tax exempt (meaning the next year they amount forgiven would be taxed at you income+forgiven debt level). Have you heard if the Fed is talking about re-instating? This could be a substantial one time out of pocket tax owed the next year.” The first part of this reader question would seem to imply to some that the FHA might regulate or set interest rates. But that’s a misconception almost as common | more...

March 12, 2014

FHA Loan Answers: Can I Skip Payments On My Mortgage If I Refinance?

By Joe Wallace

When considering your FHA home loan refinance options, there’s a list of common questions many borrowers need answers to before deciding on the right FHA refinance loan. One such question involves the state of the current mortgage before the new loan is approved. Can a borrower skip a payment on an FHA or conventional mortgage as the new FHA refinancing loan is approved? FHA loan rules address this issue in HUD 4155.1, Chapter Three, Section A. It says: “The borrower must be current on the loan being refinanced for the month due prior to the month in which he/she closes the refinancing, and for the month in which he/she closes. Example: If the borrower is closing on April 8, he/she must have made the March payment within the month of | more...