Effective for FHA loans for which the case number is assigned on or after April 5, 2010.  FHA will collect an upfront mortgage insurance premium (UFMIP) of 2.25 percent.  This policy change will increase premiums for purchase money and refinance transactions.  This includes the FHA to SHA streamline refinance.

The current UFMIP is set at 1.75% of the loan amount and is typically included in the loan amount or must be paid in full at closing.  As of right now monthly insurance premiums will remain as is (.55% or lower).  The reason for the UFMIP increase is to help FHA reach its reserve requirement set by Congress.  With the increasing default rate, steps are needed to make sure the program can stay healthy with tax payer help.

The increase in the UFMIP is minimal compared the possibility of a monthly mortgage insurance premium increase.  The UFMIP is rolled into the loan and does not heavily impact mortgage payments the way an increase in monthly insurance premiums can.

If you are thinking of buying real estate with FHA financing start before April 5, 2010.  The first time or repeat home buyer tax credit is ending soon.  With all the changes in loan products, rates, tax incentives, ask now before it is too late.

For questions please contact us!

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

FHA Upfront Mortgage Insurance Premium UFMIP increase to 2.25%

FHA Streamline 203K Home Loan Program Information

The Streamline 203K home loan program is available for home purchase or refinances.  With the streamline 203K process, you have the opportunity to go up to $35,000 in upgrades and extend an additional $10,000 for Energy Efficient Upgrades (EEU).  The additional EEU $10,000 does not count against your qualifying debt to income ratios.

Here is a list of items that the streamline 203k includes:

Exterior:

*Siding

*Roofs

*Gutters

*Windows

*Decks

*Paint

Interior:

*Paint

*Carpets

*Flooring – wood, tile, carpet, vinyl

*Kitchen

*Bathrooms

*Appliances – Energy Efficient

To close on a purchase or refinance the standard closing time frame averages 30 – 45 days depending on your scenario.  A streamline 203K will require 45 days to close.  Depending how long it will take for a general contractor, roofer, and carpet company to bid, you will want 45 days to close.  The lender will require credentials from the general contractor, roofer, etc.

This loan program is open to single family homes to a 4 plex.  Loan limits are the exact same as if you were buying with FHA financing.  Here are the local County loan limits.

For example if you are pre-approved at $300k look for homes in the $250k – $265k range.  That way you have cushion to add the $35k in upgrades and still be within your qualifying pre-approval.

Yes we are approved to do Streamline 203k home loans!

For further questions please contact us!

203K HUD Info

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

FHA Streamline 203K Home Loan

Time is running out!

First time home buyers

$8,000

Qualified existing home buyers

$6,500

An eligible taxpayer must buy, or enter into a binding contract to buy a primary home on or before April 30, 2010.  You must close by June 30, 2010 BUT an extesion is getting voted on.  The extension has been passed by the House of Representatives.  The Senate must still approve the extension before President Obama can sign it into law.  If approved you will have until September 30 , 2010 to close. This will help the volume of buyers close and claim the tax credit.

Official Link and Update from IRS

http://www.irs.gov/newsroom/article/0,,id=204671,00.html

*  Details provided in both English and Spanish

*  Military benefits

*  Link to tax form 5405

*  Q & A

*  Tax form 5405  http://bit.ly/5rzJxV

Most important was the announcement of $8,000 first time home buyer tax credit extension!!

Brief details regarding the Tax Credit for Primary Home Buyers.

President Obama has signed a bill to extend the first time home buyers tax credit through June 30, 2010.  The bill states you must be in contract no later then April 30, 2010 but you have to close prior to June 30, 2010.  The bill also provides a tax credit for those current homeowners buying a new primary home.

First time home buyers definition:  individuals that have not owned a home in the past 3 years.  The total credit is 10% of the purchase price of the home or a maximum credit of $8,000.

Current homeowner’s definition:  If you currently own a residence that you have lived in as your primary for the last 5 out of 8 years or 5 consecutive years you are eligible.  The incentive is a maximum tax credit of $6,500.

Increased Income Adjustments:

Single taxpayers who earn up to $125,000 are eligible for the total credit amount.  If you earn more then $125,000 but less then $145,000 you are eligible for a partial credit.  If your current income exceeds $145,000 you are ineligible.

Joint taxpayers who earn up to $225,000 are eligible for the total credit amount.  If you earn more then $225,000 but less then $245,000 you are eligible for a partial credit.  If your current combined income exceeds $245,000 you are ineligible.

Maximum sales price for a new home is $800,000.

Unfortunately you are not eligible to receive the tax credit upfront at closing.  IRS has started to prosecute companies claiming to provide this service.

Here are additional tax credit restrictions:

If you purchase the home from a close relative (spouse, parent, grandparent)

*Step relative does not count!

Purchaser does not use the home as a primary residence

They sell the home before year end

They are a non resident alien

Thanks

The Mortgage Reel

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

Seattle $8,000 First Time Home Buyer & $6,500 Repeat Buyer Tax Credit