The ReHab Mortgage Place
FHA IN TODAYS MARKET
FHA IN TODAYS MARKET
Today there is a lot of flexibility gone from mortgage financing. Gone are the stated income and no documentation loans, gone are the low credit score loans, gone are the flexible underwriting that will allow you to do almost anything with a good down payment.
This means there is no more "Subprime" or "Alt-"A" programs. the few that you might find are so restrictive that they serve no purpose. There has even been major changes in the "Prime" programs. Traditional Conventional lending has become more and more restrictive and costly. With the new "risk based pricing" if you do not have at least a 740 credit score you may be subject to a rate increase depending on your down payment and product. If your score is below 680 you really are priced out of the market.
Though FHa has made some recent changes unless you have a large down payment (25-30%) FHA most likely is the better program for you.
Simply put, rates and pricing adjustments are much better. Case in point.
Today an FHA 30 year fixed with 5% down and no points or origination fee with a credit score of 640 will have a rate of 6.5% while for a conventional loan the rate is 6.75% even though the start rate would be 6.125%.
Another factor to consider is mortgage insurance. For FHA it is .5% and for conventional it is .94% almost double.
Which loan would you prefer.
You may also consider Legal Credit Repair that can inmprove your credit score and there by reducing the amount you pay. For example; if your score is 580 you may qualify for an FHA loan. But if you do the rate would be 7%, which equates to a payment increase of $33.23 per one hundred thousand. That may not seem like much but thats almost $400 per year for 30 years or $12,000.00. What if the loan was 200,000 then it would be about $24,000 of extra interest. That is not including the higher cost of car loans, credit cards, etc. Plus with a 580 credit score in todays market you are turned down many times.
Contact me for questions on FHA Financing and Legal Credit Repair.
louisjeffries@hotmail.com
If you have questions please email me at louisjeffries@hotmail.com
Today there is a lot of flexibility gone from mortgage financing. Gone are the stated income and no documentation loans, gone are the low credit score loans, gone are the flexible underwriting that will allow you to do almost anything with a good down payment.
This means there is no more "Subprime" or "Alt-"A" programs. the few that you might find are so restrictive that they serve no purpose. There has even been major changes in the "Prime" programs. Traditional Conventional lending has become more and more restrictive and costly. With the new "risk based pricing" if you do not have at least a 740 credit score you may be subject to a rate increase depending on your down payment and product. If your score is below 680 you really are priced out of the market.
Though FHa has made some recent changes unless you have a large down payment (25-30%) FHA most likely is the better program for you.
Simply put, rates and pricing adjustments are much better. Case in point.
Today an FHA 30 year fixed with 5% down and no points or origination fee with a credit score of 640 will have a rate of 6.5% while for a conventional loan the rate is 6.75% even though the start rate would be 6.125%.
Another factor to consider is mortgage insurance. For FHA it is .5% and for conventional it is .94% almost double.
Which loan would you prefer.
You may also consider Legal Credit Repair that can inmprove your credit score and there by reducing the amount you pay. For example; if your score is 580 you may qualify for an FHA loan. But if you do the rate would be 7%, which equates to a payment increase of $33.23 per one hundred thousand. That may not seem like much but thats almost $400 per year for 30 years or $12,000.00. What if the loan was 200,000 then it would be about $24,000 of extra interest. That is not including the higher cost of car loans, credit cards, etc. Plus with a 580 credit score in todays market you are turned down many times.
Contact me for questions on FHA Financing and Legal Credit Repair.
louisjeffries@hotmail.com
If you have questions please email me at louisjeffries@hotmail.com
Replies to This Discussion
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Permalink Reply by Yvonne Thomas, Real Estate Broker on -
Hi Louis,
I'm interested in working with a current client using an FHA 203K acquisition/rehab loan....how do we start this process?
Yvonne Thomas
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Permalink Reply by Maria Suzette Smith on -
Following up on your article Louis, I don't know if you saw this link on lowering interest rates:
http://www.msnbc.msn.com/id/28039392
Maria Suzette
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