Lower costs are coming for homebuyers seeking a Federal Housing Administration -insured mortgage.
FHA recently announced that they are cutting annual premiums for mortgage insurance from 0.85 percent to 0.60 percent, a move the National Association of Realtors® said breathes new life into the program.
“FHA mortgage products exist to serve an important mission: providing homeownership opportunities to creditworthy borrowers who are overlooked by conventional lenders,” said NAR President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties. “The high cost of mortgage insurance has unfortunately put those opportunities out of reach for many young, first-time- and lower-income borrowers. Now, we have a real opportunity to get back on track.”
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The seller has accepted your offer, the inspector didn’t find any underground streams or shaky foundations, and the closing date is set. You’re in the homestretch! While you can breathe a little easier, remember, the deal’s not done until everyone signs all the (zillion) documents at the closing table. And, your lender can still change their mind. Here are some things to avoid in the run-up to the big day.
- Don’t mess with your income-to-debt ratio
The ratio of your monthly income to your monthly debts is one of the main factors the lender considered when qualifying you. And your lender will probably run your financials two or three more times before closing. While it’s tempting, don’t take out a big loan for the new deck you want to install when you move into your new place. Don’t sign the lease on the new Audi that will look perfect in your new driveway. The bank looks at lease payments like any other debt payment.
- Don’t disappear
Be sure to keep in touch with your lender and be readily available to immediately address any last-minute concerns.
- Don’t change jobs
Lenders love stability. Switching jobs right before closing can make them anxious, and you want to give them every reason to feel confident. Most lenders prefer to have a two-year job history in hand, so making a big career move could slow things down, or squash the deal entirely.
- Don’t open new credit cards
Yes, you’ll be buying furniture to fill those lovely rooms. Yes, you might need a new fridge. And yes, new dishes to match the new kitchen would be splendid. But resist the lure of opening new credit cards until after closing. Doing so can affect your credit score. For now, just open catalogs.
- Don’t be late
Even though you may have been riding the real estate roller coaster and life’s been chaotic, be sure to stay current with all bill payments. Late payments, too, can affect that all-important credit score.
Wondering what else is involved in the final stretches of a home purchase? I will be happy to answer any of your questions!
Many first-time buyers shy away because they think they need a bigger down payment than they really do. Contrary to popular belief, there are alternatives to putting less than 20% down on a home. This infographic highlights a few key pieces of information to consider when considering loan options with a low down payment.
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Saving for a down payment can pose one of the biggest challenges for potential home buyers.
Indeed, “a down payment is often the largest single payment a consumer makes in their lifetime and saving for it isn’t easy,” says Corey Carlisle, executive director of the American Bankers Association Foundation. “However, with a few changes, consumers can put themselves on track to make their home ownership dream a reality.”
In honor of American Housing Month, the American Bankers Association Foundation recently featured several tips to help consumers cut their household costs and start saving for a down payment.
Fixed-rate mortgages recently dropped to their lowest averages of the year, which analysts attribute to the fallout from the recent “Brexit” vote. The 30-year fixed-rate mortgage averaged 3.48 percent, only 17 basis points from its all-time record low of 3.31 percent in November 2012, Freddie Mac reports.
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Renters in some cities may face a long road toward home ownership. Faced with high rents, some may even have to wait a few decades before they’ll be able to save enough for a down payment – that is, if they keep saving at the same rate, finds a new survey by Apartment List.
About 50,000 struggling home owners could be eligible to have their mortgage balances reduced under a new plan to be unveiled by Fannie Mae and Freddie Mac, The Wall Street Journal reports. The plan was approved by the Federal Housing Finance Agency and is expected to be formally announced “within the next few weeks.”
The plan is expected to target home owners who are delinquent on their mortgage payments and who owe more on their home than it is currently worth. Fannie and Freddie also will reportedly forgive the principal only in circumstances where they determine that they would lose less money by doing so than taking other foreclosure-prevention methods.
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