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Jordan Schick

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Those Who Wait Will Pay Thousands More This Spring

03-16-10
Jordan Schick

Waiting a few extra days or weeks to purchase a home this spring could cost buyers thousands of extra dollars as the office of Housing and Urban Development (HUD) implements several changes for loans guaranteed by the Federal Housing Authority (FHA).

Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board's mortgage backed securities purchase program (which has kept home loan rates artificially low for over a year), these FHA changes make it even more important to act now to save big.

Here are a few reasons why:

On April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly.

It is important to note that in order to be eligible for the lower cost up-front mortgage insurance, a lender has to order a case number from the FHA before April 5th. A case number can only be generated for loan applications where a property is involved and a fully executed purchase contract exists. Home buyers who have been pre-approved but are not under contract will not be eligible for the reduced premium effective April 5th.

Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these "seller concessions" can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000.

There is only one way to avoid being affected by all of these costly changes that lie ahead - submit all FHA mortgage applications by the last week of March.

If I can answer any questions you may have about how these changes could impact you, call us.

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100% No Money Down

10-21-08
Jordan Schick

USDA Rural Development Loans

100% No Money Down

Efforts to strengthen the economy of rural communities in Iowa include the USDA Guaranteed Housing Loan, which provides 100% financing for borrowers in towns with populations of 10,000 or less. This loan is available for borrowers to purchase a home as their primary residence. This 30 year fixed rate mortgage is available to families whose income does not exceed 115% of median income for their county or MSA. There is a 2% funding fee which is financed into the loan, and there is NO monthly mortgage insurance required!

Rural Development Income Limits (IOWA)

By Number of Occupants Who Will Live In The Dwelling

County, IA

1 Person

2 Person

3 Person

4 Person

5 Person

6 Person

Benton

$49,550

$56,600

$63,700

$70,750

$76,400

$82,050

Bremer

$49,550

$56,600

$63,700

$70,750

$76,400

$82,050

Buchanan

$49,550

$56,600

$63,700

$70,750

$76,400

$82,050

Fayette

$49,550

$56,600

$63,700

$70,750

$76,400

$82,050

Grundy

$49,550

$56,600

$63,700

$70,750

$76,400

$82,050

Hardin

$49,550

$56,600

$63,700

$70,750

$76,400

$82,050

Tama

$49,550

$56,600

$63,700

$70,750

$76,400

$82,050

Rural Development Highlights

Minimum 620 Credit Score

No Monthly Mortgage Insurance Premium (PMI)

Up to 6% Seller Concessions

100% Financing/No Money Down

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Many will profit from Fannie Freddie failure - Will you?

09-16-08
Jordan Schick

Mortgages are in the news again today...but this time, the news is good! Especially for people looking to buy or refinance a home, as interest rates have dropped to the lowest levels seen since April.

You've probably heard that Fannie Mae and Freddie Mac were taken over or "bailed out" by the Federal Government over the weekend. The announcement came as the government felt that both of these institutions were potentially unable to meet their obligations. These agencies must pay off maturing Bonds every month, and they do so by selling new Bonds. But during the last twelve months, investor appetite to purchase new mortgage-backed security Bonds has deteriorated. As such, it has become more difficult for Fannie and Freddie to replenish capital to fund more loans. If both Fannie and Freddie became insolvent, the housing market as well as the mortgage market would come under further pressure.

With the Treasury stepping in to provide a "backstop" for the mortgage giants, investors now have confidence to purchase Mortgage Bonds. And the greater interest has helped lower interest rates today.

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