U.S. Governments April Fool's Joke

By the time you read this, the U.S. Governments April Fool's joke will have taken effect.  That is the increase of the FHA MIP.  But never fear, they have the next thing all set to take effect in early June.  At that time a loan case number pulled after June 3 will carry with it the privilege of paying the MIP for the life of the loan.  Presently if you reach the  point of 78% of the appraised value or purchase price (whichever is less) the MIP Will drop off.  (with a minimum of 5 years).  So if you are in the market for a home , and need to use an FHA loan, it would behoove you to go ahead and get it done.  Call or email me for details on how to avoid FHA.

Outlook for a Housing Market Recovery

 Home prices may well find a bottom this year, and stronger sales should pave the way for a pickup in single-family construction over the course of 2012.

That’s the assessment made by Harvard University’s Joint Center for Housing Studies (JCHS) in its recently released “State of the Nation’s Housing” report. The report - which has been released since 1988 - is an essential resource for both public policy makers and private decision makers in the housing industry.

The bottom line of the report is that - after several false starts - there is reason to believe that 2012 will mark the beginning of a true housing market recovery.

 

However, employment growth remains a key factor, providing the stimulus for stronger household growth and bringing relief to some distressed homeowners. And, if the broader economy weakens in the short-term, the housing rebound could again stall.

 

Here are just some of the findings in the report:

 

• The monthly mortgage payment for the typical home currently compares more favorably to rents than at any time since the early 1970s.
•  
• By the first quarter of 2012, existing home sales were 5.2 percent above year-earlier levels, with single-family sales up 6.3 percent.
•  
• Sales of newly constructed homes in the first quarter of 2012 stood 16.7 percent above year-earlier levels.
•  
• The inventory of existing homes for sale shrank by some 23 percent in 2011, reducing the supply in the first quarter of 2012 to its lowest level since 2006.
•  
• Single-family permitting, a leading indicator of starts, was also up 16.9 percent in the first quarter of 2012.

The complete report provides a current assessment of:

 

• The state of the housing market and the foreclosure crisis
•  
• The economic and demographic trends driving housing demand
•  
• The state of mortgage finance
•  
• Ongoing housing affordability challenges

 

You can download the full report from the JCHS’s website. You can also download a convenient handout of Key Housing Industry Facts from the website.

 

 

 

~~Mortgage Market Guide

 

 

 

T-Minus 5 Days to FHA MIP Increase....

It is T minus 5 days (in reality 2 days) to get an FHA case number for refinances and purchases.  I know I have been over and over this.  Next week it won’t be an issue any more. It will just be what it is.  But for now I don’t want anyone to pay more than they have to.   If you don’t know what MIP is, here is a short explanation.  There is more risk to a lender when the down payment is less than 20%.  So to make up for that risk the MIP is charged and supposedly put in a pool to pay for losses.

Call me, 615-777-4663, check out my website http://www.mignashville.com/ or email me at george.margrave@mignonline.com let's get you taken care of!

Credit Inquiries and What They Mean

We get many questions about how many points are affected by a credit inquiry. This is a simple yet difficult question to answer. Let me explain. There are two types of inquiries that a person must take into consideration. Here is a look at both of them:


Soft Inquiries: These do not affect your credit score and thus you don’t have to worry about them. They are reported on your credit report which confuses many people. A soft inquiry, or “soft pull” as we refer to them, are harmless in nature. There are many examples. Here are a few:

1) You have a credit card and you see they have pulled your credit. This is done by your credit card company to see if you have missed paying any of your other financial obligations. If you have been late, this allows them to increase the interest rate on your credit card per your agreement! Very few people notice this when they open a credit line because they don’t read the agreement.

I know what you’re saying: what does a late payment on some other line of credit have to do with my payment history on this credit card? Yes it’s unfair but non-the-less reality.

2) Pulling your free annual credit reports at www.annualcreditreport.com. Again, these don’t affect your score and is something everyone should do once a year. The credit reports are free but you have to pay a fee if you want the score.

3) Lending institutions regularly pull your credit for “pre-approved” offers. You know the main culprits here—usually credit card companies that want your business.

4) A few other examples are when you apply for employment or by landlords for renting or leasing an apartment or a house.

Hard Inquiries: Ok, these are the only ones you have to worry about. When I talk to clients I make it simple by telling them if you apply or initiate an application for a vehicle, credit card, line of credit or a mortgage etc… then it is factored into your credit score.

From my experience many people get into trouble with inquiries when they are making purchases at major department stores or other large businesses. At checkout the clerk tells them they can get “15% off this purchase” if they apply for a credit card or line of credit with that business. Do not do this! Department store cards are not rated the same as major credit cards and the interest rates are usually much higher!

Finally, keep in mind hard inquires stay on your report for two years but are most often only factored into your score if they are within the last six months.



From Thomas McGee

By the way T-minus 12 on the increased MIP. Call me so I can help you avoid it.

You can reach me at 615-777-4663 or via email at george.margrave@migonline.com

Good news and bad news

I have told you about how HUD is raising the MIP for their borrowers after April 1. Actually the final letter says April 9th now, so we got a few more days. So If you are thinking of buying, you would save money by getting the transaction far enough along to order the FHA case number and appraisal by then. The countdown is T minus 26 days


Now the good news. People that currently have an FHA loan that was closed prior to the first part of 2009 (date to be determined) will be able to get a considerably lower MIP for their refinance. This will mean a big savings. So if I ran the numbers for you and it didn’t look very good, it is about to get a lot better. But we have to wait until June 11.


You can reach me at 615-777-4663 (HOME) or email me at George.Margrave@migonline.com .  

Higer MIP Coming April 1, 2012

No, that is NOT an April Fool's joke, but you can bet it really looks like one.

The FHA announced that it is raising Mortgage Insurance Premiums (MIP) for FHA mortgages. These increases will only impact new FHA loans and DO NOT impact existing FHA borrowers. The MIP changes can be summarized as follows:



* Upfront MIP increase by 0.75 points to 1.75%. The UFMIP as is the case now can be financed into the mortgage. This change is to be effective from April 1, 2012.


* Effective April 1, 2012 FHA is also increasing its MIP by 10 bps as required by the Temporary Payroll Tax Cut Continuation Act of 2011.


The FHA estimates these changes will add over $1 billion to their fund based on their volume projections through September 30, 2013.


We will have additional details as soon as possible.


From Jesse Lehn, MIG

Remember you can always reach me at george.margrave@migonline.com or http://www.mignashville.com/ or by phone at 615-777-HOME (4663). 

What's the real cost of the payroll tax cut?

When you heard that our Federal Government had extended the tax cut and long term unemployment benefits for two months, you were probably glad. If you read on, you discovered that the two months were financed on the back of the Real Estate industry. (For 10 years!) Details are still sketchy, but from what I understand every FHA, Fannie Mae or Freddy Mac loan closed for 10 years will have a 10 basis point surcharge. (That is almost the equivalent of .125% increase in the rate of probably about 90 percent of the loans that will close in that period.) Now I ask you which industry does our country desperately need to turn around? That is right, the real estate industry! So why not raise their cost?


I am honestly wondering if anyone in either party has a clue what they are doing up there.

I'm just saying----.
You can reach me at 615-777-4663 (HOME) or email me at George.Margrave@migonline.com .

New FHA Rules Go Into Effect 4/18/2011

Are you intending to buy a home this Spring with a small down payment (FHA Loan)? If you get it under contract before April 18, your payment will be less than it will be if you wait until after that date. The mortgage insurance the Dept of HUD charges goes up .25% then. That doesn't sound like much, but on a $150,000 home that is $31.25 per month. That is a lot of money over the life of the loan.

So if you need something besides low interest rates and prices rolled back to levels seen in the early 2000s, this could be a great reason to move forward. Call me for details. You don't have to close by then. We just have to order the case number.

I can be reached by phone at 615-777-4663 or via email at george.margrave@migonline.com