FHA 203k Loans: Purchase An Existing 1-4 Unit Dwelling To Renovate, Purchase And Move An Existing Dwelling To Another Site, And Renovate An Existing Residence

10 09 2012

CALL 800 385-3503 FOR FHA 203K RENOVATION LOAN INFORMATION

This program can be used to accomplish rehabilitation and/or improvement of an existing one-to-four unit dwelling in one of three ways:

  • To purchase a dwelling and the land on which the dwelling is located and rehabilitate it.
  • To purchase a dwelling on another site, move it onto a new foundation on the mortgaged property and rehabilitate it.
  • To refinance existing liens secured against the subject property and rehabilitate such a dwelling.

To purchase a dwelling and the land on which the dwelling is located and rehabilitate it, and to refinance existing indebtedness and rehabilitate such a dwelling, the mortgage must be a first lien on the property and the loan proceeds (other than rehabilitation funds) must be available before the rehabilitation begins.

To purchase a dwelling on another site, move it onto a new foundation and rehabilitate it, the mortgage must be a first lien on the property; however, loan proceeds for the moving of the house cannot be made available until the unit is attached to the new foundation.

http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm





FHA 203k Renovation Mortgages Allow Homebuyers To Purchase Or Refinance And Rehabilitate The Property With One Loan

20 08 2012





Low 30-Year Fixed Mortgage Rates Not Reviving The Housing Market As Homeowners Do Not Qualify For Refinances

15 08 2011

The turmoil in the financial markets has been pushing mortgage rates lower. Thirty-year fixed-rate mortgages have now fallen to about 4.3 percent, which is very close to the lowest level on record.But many Americans can't qualify for those low rates, and analysts say these historic interest rates aren't likely to do much to help the housing market.





Freddie Mac Reports That “Cash Out Refinances” Fall To 23% Of Total In 2nd Quarter 2011, Down 50% From Historical Average; “Rate-And-Term” Refinances Reduce Note Rates By Average 1%

2 08 2011
  • In the second quarter of 2011, 77 percent of homeowners who refinanced their first-lien home mortgage either maintained about the same loan amount or lowered their principal balance by paying-in additional money at the closing table. Of these borrowers, 51 percent maintained about the same loan amount, and 26 percent of refinancing homeowners reduced their principal balance.
  • “Cash-out” borrowers, those that increased their loan balance by at least five percent, represented 23 percent of all refinance loans; the average cash-out share during the 1985 to 2010 period was 46 percent.
  • The median interest rate reduction for a 30-year fixed-rate mortgage was about 1 percentage point, or a savings of about 18 percent in interest rate. Over the first year of the refinance loan life, these borrowers will save over $1,550 in interest payments on a $200,000 loan.
  • The net dollars of home equity converted to cash as part of a refinance of a conventional, prime-credit home mortgage was an estimated $7.5 billion in the U.S. during the second quarter, similar to the first quarter level but substantially less than during the peak cash-out refinance volume of $83.7 billion during the second quarter of 2006. Taken together over the first two quarters of 2011 and adjusting for inflation, the amount of equity cashed-out was at the lowest level in 15 years, since the second half of 1996.
  • Among the refinanced loans in Freddie Mac’s analysis, the median value change of the collateral property was a negative 7 percent over the median prior loan life of five years. In comparison, the Freddie Mac House Price Index shows about a 25 percent decline in its U.S. series between March 2006 and March 2011. Thus, borrowers who refinanced in the second quarter owned homes that had held their value better than the average home, or may reflect value-enhancing improvements that owners had made to their homes during the intervening years.

Quotes

Attributed to Frank Nothaft, Freddie Mac vice president and chief economist:

  • “This is primarily a ‘rate-and-term’ market, meaning that the typical homeowner is looking to cut their interest rate or shorten their loan term. More than three-in-four borrowers are keeping their loan balance about the same or reducing their loan balance when they refinance.
  • “Savvy homeowners are taking advantage of some of the lowest fixed-rates in more than 50 years to lock in interest savings. Over the first half of 2011, fixed-rate mortgage rates hit a low during June, with 30-year product averaging 4.50 percent and 15-year averaging 3.68 percent over the last four weeks of June, according to our Primary Mortgage Market Survey.”

For more:  http://freddiemac.mediaroom.com/index.php?s=12329&item=48719





Freddie Mac Report On Home Mortgages Finds 95% Of Refinance Loans Are Fixed-Rate Loans With 34% Choosing 15- Or 20-Year Programs

18 05 2011

 

  • Fixed-rate loans accounted for more than 95 percent of refinance loans in 1st Quarter 2011
  • 34% chose a 15- or 20-year loan, the highest such share since the first quarter of 2004
  • 84% of borrowers who had a hybrid ARM chose to refinance into a fixed-rate product during the 1st Quarter
  • “Fixed mortgage rates averaged 4.85% for 30-year loans and 4.12% for 15-year loans, well below long-term averages
  • The Bureau of Economic Analysis has estimated that 6% was the average rate for SFR’s at the end of 2010

For more:  http://freddiemac.mediaroom.com/index.php?s=12329&item=39019





Home Renovations Are A “Smart Investment” For Homeowners With Rates Still At Historically Low Levels

3 02 2011

 

INTEREST RATES ARE LOW

  • Low interest rates (still under 5% in most cases) make conventional cash-out refinances (if you have required equity in home) extremely attractive
  • An FHA 203k Renovation loan will allow a full home remodel (add a room, renovate the kitchen, add a bathroom, new windows and flooring, etc.) up to 110% of the home’s  “after-improvement” value multiplied by 96.5%. 
CONTRACTOR’S ARE DISCOUNTING
  • Business is still slow for contractors
  • The top pros in town will happily bid on your job — and prices can be 10-20% below what you would have paid 3 years ago

COST OF MOST MATERIALS ARE LOWER

  • Building supply costs have tumbled too.
  • Plywood is down 23% since its peak in the mid-2000s.
  • Drywall is off 29%,
  • Framing lumber is 35% lower
  • Other supplies are only slightly lower, such as roofing and insulation

ENERGY COSTS WILL BE LOWER AFTER THE REMODEL

  • Basic remodels will save utilty expenses with new insulation, windows and
  • Lower electric and heating bills are like an annual dividend.

RENOVATING YOUR HOME COSTS LESS THAN TRADING UP

  • The median home price down 22% since 2006
  • Selling your home in this market will be tough with 10-20% discount likely, including commissions and fees
  • Moving expenses remain expensive

MOST IMPROVEMENT PROJECTS WILL ADD VALUE LONG-TERM

  • Keep your home consistent with the best homes in the neighborhood and you will earn back the costs over time
  • Exceeding the other homes in the neighborhood and the costs don’t make make as much
  • Renovating that 30-to 40-year old kitchen makes sense. Adding bedrooms makes sense.

For more: http://money.cnn.com/2011/02/02/pf/saving/invest_in_your_home.moneymag/





FHA Streamline Refinances Requires NO APPRAISAL For Current FHA Homeowners Who Have No Late Payments On Loan Held For 6 Months Or Longer

12 12 2010

Who qualifies for an FHA streamline loan?

  • Home owners that currently have an FHA loan.
  • Must have the loan for 6 months or longer.
  • No delinquencies on the mortgage in the last 12 months.

Is there an appraisal required?

The thing that sets this loan apart is that there is no need for an appraisal. Certain guidelines are added when you skip the appraisal, but it is still a good deal if your property is reduced in value from your original purchase price. In the event that your value supports an appraisal, doing an FHA streamline with one will allow you to include the closing costs in your loan.

Is this the same as an FHA 203k Streamline?

This is used when the home needs refurbishing to make it livable, available only on purchases. Get more information on the FHA 203k loan program here.

What is a no-cost streamline loan?

No-cost loans are available on just about all loan types, but the catch is you are going to pay a higher interest rate. By choosing to have no upfront costs, you are agreeing to have a higher monthly payment, thereby financing your closing cost. This is not really no cost, but more like deferred costs. Still, it may be a good choice depending on your scenario.

Does the FHA Streamline have Mortgage insurance?

There is no way to avoid it, all FHA loans require mortgage insurance. You can finance the upfront 1% fee, but the anuual.90% is there for several years.

We have just covered a few of the common questions associated with FHA Streamline mortgages. If you have an FHA mortgage and you want to see if you can get a better rate, this may be the perfect program for you. Keep in mind though, that you may have to come in with a few dollars to close your loan if you don’t want to have an appraisal.

 For more:  http://www.stockmarketsreview.com/realestate/2010/12/09/5-fha-streamline-facts-you-need-to-know/