Louisville Kentucky FHA Seller Contributions and Closing Costs

Louisville Kentucky FHA Seller contributions can make a big impact for a first time home buyer struggling to save the required 3.5% down payment let alone all other related fees. A seller who understands the benefit and has the ability to offer assistance could make the difference between purchasing a home now and continuing to rent.

Louisville Kentucky FHA Maximum Seller Contributions

Louisville Ky FHA guidelines allow the seller to contribute up to 6% of the sales price toward the buyers closing costs, discount points, and prepaids. The seller is also allowed to pay the upfront mortgage insurance premium (MIP) which is typically rolled into the cost of the loan.

Common FHA Closing Costs:

Below is a list of customary fees associated with an Kentucky FHA loan. This is only an example of costs the seller may pay on your behalf and does not include all allowable costs per Kentucky FHA guidelines. Make certain your lender provides you with an itemized list known as a Good Faith Estimate.

  • Origination fee – The maximum origination fee is 1 percent of your loan amount, or 2 percent of the loan amount if it’s a home equity conversion loan.
  • Appraisal fee to determine the value of the home
  • Costs associated with your mortgage credit report
  • Attorney’s fees, title search fees, title insurance – Attorney’s fees are not typical in Colorado, but title fees are and can range from $250 to $1,500 depending on the home’s location.
  • Prepaid interest – You will pay interest accrued between the closing date and the end of the month.
  • Upfront premium for your Kentucky FHA mortgage insurance. This will be 1.5 percent of the loan amount, but you may be able to roll it into your loan.
  • Escrow amounts for future taxes and insurance – You will be required to pay 1 year of homeowner’s insurance and a few months of your property taxes.
  • Discount points (if applicable)
  • Up Front Mortgage Insurance Premium (MIP)
  • Buy Downs (cost incurred for a permanent or temporary interest rate buy down)While the total amount of your closing costs might seem like a hefty price to pay, keep in mind what you’re getting in return:A home you can call your very own.

Title Insurance Information

Title Insurance Information.

via Title Insurance Information.

Kentucky FHA Streamline Mortgage Refinance Program at Lower Interest Rates

FHA Streamline Mortgage Refinance Program at Lower Interest Rates

Pittsfield, MA — (SBWIRE) — 03/28/2013 — Real-estate-yogi.com understands that he’ll need advice about this process, and is here to provide it, including:

– FHA Streamline Refinance Defined
– Eligibility for FHA Streamline Refinance
– Advantages to FHA Streamline Refinance
– No Verification of Information

Explanation of FHA Mortgage Streamline Refinance

An FHA Streamline mortgage refinance is a special financial product available only to those who currently have an FHA mortgage loan. Being part of the FHA Streamline mortgage refinance program is the fastest way for an FHA-insured borrower to refinance his mortgage. The program’s crucial characteristic is that there’s no need to have the home appraised. As an alternative, the FHA allows one to use the original price of the home as its current value, no matter what it is valued at today.

Qualify for FHA Streamline Mortgage Refinance Program at Lower Interest Rates , Apply Here!!

Eligibility Requirements for FHA Streamline Refinance

The first eligibility requirement for FHA mortgage Streamline refinance is to have a current FHA-insured mortgage. A homeowner must be current on his existent loan and have a history of on-time payments for one year. He must own the property for a minimum of six months before refinancing, and he must work with an FHA-approved lender. Closing costs must be paid up-front to make the process smoother.

FHA Streamline Refinance Advantages

There are several advantages to having an FHA refinance. FHA Streamline refinance mortgage rates are lower than those of non-FHA loans. They vary from 2. 25% to 2.75%. Private lenders may charge up to 5% or more. The difference between the two can mean a yearly savings of $3,000, or $250 per month. People whose credit leaves something to be desired can be approved for this type of refinancing, and the refinance mortgage is “assumable,” which means that if someone purchases one’s home, the loan can be taken over by the buyer.

No Need to Verify Data

When applying for an FHA Streamline refinance mortgage, keep this in mind: There is no need to verify any information on the application. That’s right; no checking of employment records, no looking at income, no confirmation of any data. It’s not as nutty as it seems; what the FHA does is “insure” mortgages, it doesn’t create them, so it’s in the best interests of the FHA to help lots of folks enjoy today’s low refinance rates. That’s why they don’t authenticate any data.

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Real-estate-yogi.com is here to help those in need of financial guidance receive it – at no cost –from the fiscal experts on hand, located in Pittsfield, Massachusetts. For a complimentary conference, dial 800-987-1397.

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This article, FHA Streamline Mortgage Refinance Program at Lower Interest Rates, is syndicated from SBWire and is posted here with permission.
Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.comKey Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

Kentucky FHA PMI Changes for 2015

Louisville Kentucky FHA Mortgage Insurance Changescropped-cropped-homes_for_sale_louisville_ky_real_estate_condos_townhouses_patio_homes_louisvilles_choice_realty_banner.jpg

FHA MI Premiums Reduced
*Revised*

Effective 01/26/2015

Submit Your Loans and Take Advantage of the
New Reduced MI Premiums Today!

HUD announced in Mortgagee Letter 2015-01, certain FHA loans will have a reduced monthly MIP factor as reflected in the below table. The rate reduction for annual MIP applies to all FHA mortgages with terms greater than 15 years, excluding streamline refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009.

Loan Amount LTV (%) Previous New
< $625,500 < 95.00% 130 bps 80 bps
< $625,500 > 95.00% 135 bps 85 bps
> $625,500 < 95.00% 150 bps 100 bps
> $625,500 > 95.00% 155 bps 105 bps

 

  Thanks to previous changes to the FHA program, borrowers now have to pay mortgage insurance premiums longer than ever.

The length of time on which you’ll pay mortgage insurance premiums on your FHA loan is as follows:

Mortgage Term Loan to Value Ratio Length of Mortgage Premium
15 years or shorter Up to 90% 11 years
15 years or shorter Greater than 90% Full loan term
Greater than 15 years Up to 90% 11 years
Greater than 15 years Greater than 90% Full loan term

Source: HUD.gov.

Kentucky FHA PMI Rates Changes 2013

Effective April 1, 2013 these are the new Kentucky FHA PMI Rates. There are two kinds of Kentucky FHA PMI Insurance.  To calculate your FHA PMI Premium for a Kentucky FHA loan – take your Loan Amount and multiply it by the UFPMI rate (which will likely be 1.75%).  Add that PMI Dollar Figure to your loan amount.  That’s what your principal and Insurance is going to be based upon.

Then that that TOTAL Loan Amount (including your Upfront PMI) and multiply that by the Annual FHA PMI Rate.  Divide that number by 12.  You will have THAT amount added to your Principal and Interest Payment with loans that have case numbers pulled after the end of March 2013.

Additionally, you will note that the new effective annual FHA PMI rates for loans with an LTV of less than or equal to 78 percent and with terms of up to 15 years have gone from ZERO to .45%. The new annual FHA PMI changes ONLY for these loans is effective for case numbers assigned on or after June 3, 2013.   

Term > 15 Years

Base Loan Amount

LTV

Effective Annual PMI UFPMI
≤$625,500 ≤ 95.00% April 1, 2013 1.30 % 1.75%
≤$625,500 > 95.00% April 1, 2013 1.35 % 1.75%
Above $625,500 ≤95.00% April 1, 2013 1.50% 1.75%
Above $625,500 > 95.00% April 1, 2013 1.55% 1.75%
NOTE! Guideline Change. NO MATTER What the LTV is, there is a FHA PMI fee

Term > 15 Years

Base Loan Amount

LTV

Effective Annual PMI UFPMI
≤$625,500 ≤ 90.00% April 1, 2013

.45%

1.75%
≤$625,500 > 90.00% April 1, 2013

.70%

1.75%
Above $625,500 ≤ 90.00% April 1, 2013

.70%

1.75%
Above $625,500 > 90.00% April 1, 2013

.90%

1.75%
Exception: New Streamline Refinances previously endorsed on or before May 31,2009
Base Loan Amount

LTV

Effective Annual PMI UFPMI
Any Amount

Any

June 11, 2012

.55%

.01%

Note that FHA has also issued guidance regarding how long FHA PMI will be on the loan. Effective June 3, 2013 the following will be in effect:

Previous and New FHA Annual PMI Duration

Term

LTV

Effective Previous New
≤ 15 yrs ≤ 78 April 1, 2013 No annual MIP 11 years
≤ 15 yrs > 78 – 90.00 April 1, 2013 Cancelled at 78% LTV 11 years
≤ 15 yrs > 90.00 April 1, 2013 Cancelled at 78% LTV Loan term
> 15 yrs ≤ 78 April 1, 2013 5 years 11 years
> 15 yrs > 78 – 90.00 April 1, 2013

Cancelled at 78% LTV & 5 yrs

11 years
> 15 yrs > 90.00% April 1, 2013

Cancelled at 78% LTV & 5 yrs

Loan Term
action
Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell

Kentucky FHA Streamline Refinance Changes 2012

Kentucky FHA Streamline Refinance Changes 2012

 

 

FHA ANNOUNCES PRICE CUTS TO ENCOURAGE STREAMLINE REFINANCING for Kentucky FHA Homeowners
Millions of Kentucky FHA borrowers  and other borrowers in other states could save big on their monthly payments to FHA 

WASHINGTON – Today, Acting Federal Housing (FHA) Commissioner Carol Galante announced significant price cuts to Kentucky FHA’s Streamline Refinance Program that could benefit millions of borrowers whose Kentucky mortgages are currently insured by FHA.   Beginning June 11, 2012, FHA will lower its Upfront Mortgage Insurance Premium (UFMIP) to just .01 percent and reduce its annual premium to .55 percent for certain FHA borrowers.

To qualify, borrowers must be current on their existing FHA-insured mortgages which were endorsed on or before May 31, 2009.  Late last month, FHA also announced it will increase its upfront premiums on most other loans by 75 basis points to 1.75 percent.  In addition, FHA will raise annual premiums 10 basis points and 35 basis points on mortgages higher than $625,500. Read FHA’s new Mortgagee Letter.

“This is one way that FHA can make a real difference to help homeowners who are doing the right thing, paying their bills on time and want to take advantage of today’s low interest rates,” said Galante.  “By significantly reducing costs for these borrowers, we can make certain they cut their monthly mortgage burden which will benefit the housing market and the broader economy in the process.”

Currently, 3.4 million households with loans endorsed on or before May 31, 2009, pay more than a five percent annual interest rate on their FHA-insured mortgages.  By refinancing through this streamlined process, it’s estimated that the average qualified FHA-insured borrower will save approximately $3,000 a year or $250 per month. FHA’s new discounted prices assume no greater risk to its Mutual Mortgage Insurance (MMI) Fund and will allow many of these borrowers to refinance into a lower cost FHA-insured mortgage without requiring additional underwriting.  FHA-insured homeowners should contact their existing lender to determine their eligibility.

Last month, the Obama Administration announced a broad package of actions and legislative proposals to help responsible homeowners save thousands of dollars through refinancing. This includes the changes announced today that will benefit current FHA borrowers – particularly those whose loan value may exceed the current value of their home.  By lowering monthly mortgage costs for home-owners, FHA hopes to help more borrowers stay in their homes, thereby decreasing the potential for future default and reducing losses to the Mutual Mortgage Insurance (MMI) Fund.

The changes outlined in today’s mortgagee letter apply to all mortgages insured under FHA’s Single Family Mortgage Insurance Programs except:

Kentucky FHA loans

Kentucky FHA loans have always been a great alternative for people who don’t quite qualify for Conventional financing.  The guidelines are more forgiving allowing for smaller down payments, higher debt to income ratios, some credit issues, and more sources for the down payment.  The great thing is that the interest rate is only slightly higher than a conventional loan. Sometimes the interest rate is actually lower.  Remember this!  IF you go to a Kentucky Mortgage Broker or a Bank and the rate quoted is exceptionally higher, they are charging you too much.  Call around for quotes.  You will usually get a better rate from a Kentucky Mortgagebroker.

Advantages:

  1. Kentucky FHA loans are not as strict on credit scoring. We can go down to a 580 credit score with compensating factors and if it makes sense.
  2. High debt to income ratios: 31% / 55%
  3. 100% of down payment can be a gift from: relative, close friend, or employer. Currently Kentucky Housing will give you up to $4000.oo for downpayment assistance with Kentucky FHA mortgage loans
  4. Seller, builder, or realtor can pay up to 6% of the sales price towards the buyers closing costs, discount points, prepaids,  and up front mortgage insurance premium.
  5. Buyer can finance closing costs into the loan, except for prepaids and discount points.
  6. Credit criteria is not as strict as a Conventional loan.  In fact, you might qualify if you have filed a chapter 13 bankruptcy and have been in it for at least one year.

Disadvantages:

  1. Kentucky FHA mortgage insurance may be more expensive than Conventional mortgage insurance.
  2. Maximum loan amounts are lower than conventional loans and they are determined by area.

Type of Kentucky FHA loans available

FHA loans are government-backed, which protect lenders against defaults, making it possible to offer prospective borrowers lower interest rates. Keep in mind that the FHA doesn’t actually lend money to borrowers, nor does the agency set the interest rates on FHA loans, it simply insures them.

Because FHA loans are government-insured, they have easier credit qualifying guidelines than most lenders, as well as relatively low closing costs and down payment requirements.

With an FHA loan, your down payment can be as low as 3.5% of the purchase price, and closing costs can be bundled with the loan amount.

Types of FHA Loans

The FHA has a variety of loan programs for first-time homebuyers, along with reverse mortgages for senior citizens, and has insured more than 34 million mortgages since 1934.

FHA loans are available for both purchases and refinances, including cash out refinances. FHA loans can be used to finance residential 1-4 unit properties, including condominiums, manufactured homes and mobile homes (provided it is on a permanent foundation), but you can hold only one FHA loan at any given time.

FHA loans can be either adjustable-rate mortgages or fixed-rate mortgages. If the interest rate is adjustable, it will be based on the 1-Year Constant Maturity Treasury Index, which is the most widely used mortgage index.

 

FHA Mortgage Insurance Premium Costs

If the loan-to-value (LTV) is greater than 80%, mortgage insurance is required. FHA loans have an upfront mortgage insurance premium equal to 1% of the loan amount. This is typically bundled into the loan amount and paid throughout the life of the loan.

You must also pay an annual mortgage insurance premium if you take out an FHA loan.

Beginning October 4, 2010, if the loan-to-value is less than or equal to 95%, you will have to pay an annual mortgage insurance premium of 0.85% of the loan amount.  For FHA loans with an LTV above 95%, the annual insurance premium is 0.90%.

FHA Credit Score Requirements

Borrowers with credit scores of 580 and above are eligible for maximum financing, or just 3.5 percent down.

If your credit score is between 500 and 579, your FHA loan is limited to 90 percent loan-to-value (LTV), meaning you must put down 10%.

If your credit score is below 500, you are not eligible for an FHA loan.

The FHA, like any other bank or mortgage lender, has guidelines that need to be met, but generally makes it easy for potential homeowners to qualify for a loan.

Since the mortgage crisis struck, FHA loans have become increasingly popular, essentially replacing subprime lending, largely because of their relatively easy underwriting requirements and government guarantee.

But make sure you compare FHA loans with conventional loans as well. There will be cases when the benefit of one outweighs the other.

FHA loans are not guaranteed to be a better deal than other mortgages, so take the time to shop around. And watch out for unscrupulous FHA-qualified lenders who may attempt to misinform you.