FHA Home Purchase Loan Options
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Transcript of FHA Home Purchase Loan Options
A Complete Guide to FHA Purchase Loan Options
Thank You for Attending
We Will Begin in a MomentClass will begin at 7:00pm
Presented By:Broadview Mortgage Corporation
Presenter:Scott Schang
Contact Information:
Phone: [email protected]
A Complete Guide to FHA Purchase Loan Options
The Purpose and Goals of this Class
• To Create and Empower Home Owners
• Educate you about the FHA purchase options available to you in today’s market
• Empower you with the ability to make educated decisions about your home financing options
• Encourage you to ask questions and get informed about the home buying process
A Complete Guide to FHA Purchase Loan Options
Topics We Will Cover In This Class
• What’s new in 2009 with FHA financing
• A Complete Guide to FHA purchase loans
• Qualifying for the $7,500 Federal Tax Credit
• Wrap Up and Take Aways
A Complete Guide to FHA Purchase Loan Options
Ask Questions throughout presentation
– You may type questions in at any time during the presentation – Questions box on your screen
– FHA loan specialists are standing by to answer your questions during the presentation
– The only dumb question is the one you don’t ask
Write number down now in case you get disconnected
1-866-667-6724
A Complete Guide to FHA Purchase Loan Options
What’s New in 2009
• 2009 FHA Loan Limits– Based on MSA – from up to $625,500– “FHA Jumbo” is anything above $417,000
• Results in slightly higher interest rates
• Down Payment Requirement– Increased from 3% to 3.5%
• Private Mortgage Insurance - PMI– Upfront PMI increased from 1.5% to 1.75%– Monthly PMI increased from .50% to .55%
A Complete Guide to FHA Purchase Loan Options
Borrower Eligibility
• Credit Score Requirements– 580 Minimum Credit Score as a guideline– Can go lower on exception basis– 620 Minimum Credit Score – “FHA Jumbo”
• Loan amount over $417,000
• Non traditional credit lines temporarily suspended as of 4th quarter 2008– Lack of credit score or depth of credit
supplemented by alternative sources• Phone bills, utility bills, auto insurance…etc.
• Investors not accepting – Market Conditions
A Complete Guide to FHA Purchase Loan Options
Borrower Eligibility
• Employment Requirements– Must have 2 year history of employment
• If in school or military provide transcripts or discharge papers
– Self Employed must have minimum 2 year history• Business license and tax returns
– Gaps in employment must be explained• Must be at new job for at least 6 months
A Complete Guide to FHA Purchase Loan Options
Borrower Eligibility
• Income Qualifying Guidelines– Automated underwriting approve/eligible
• Debt to income ratios approved
– FHA Total Scorecard – Manual Underwriting• Much more restrictive debt to income ratios
– Non Occupying Co-Mortgagors • Can use income of Co-Signer to help qualify
– All FHA Loans require full income documentation• Tax returns, W2’s, Pay Stubs
A Complete Guide to FHA Purchase Loan Options
Borrower Eligibility
• Income Qualifying Guidelines– Converting Existing Homes into Rentals
• Bad Apples - Effective September 19th, 2008• Temporary exclusion of rental income from
vacated property– Must qualify for full PITI payments on both
homes.• Exception – Relocation with new employer or
transferred by the current employer– Must have executed 1 year lease – Copy of deposit check
• 75% Equity – Appraisal or balance vs. price
A Complete Guide to FHA Purchase Loan Options
Borrower Eligibility Highlights
• Do not have to be first time home buyer
• No income limitations
• Flexible qualifying criteria
• Can own other properties
• Can use non occupying co-mortgagers to qualify
A Complete Guide to FHA Purchase Loan Options
Property Eligibility
• 1-4 Units ok – Owner occupied only
• Loan limits increased for 2,3,4 units– Limits determined by MSA – See site for link
• No asset requirements for 1-2 unit homes– 3 months PITI required for 3-4 units
• Can buy any eligible property including short sales and foreclosures– Typically must be owned minimum of 90 days– Foreclosures are the exception
A Complete Guide to FHA Purchase Loan Options
Property Eligibility
• Appraisal requirements are much more strict than conventional lender guidelines– Inspection is significantly more thorough– Property must be in “livable condition”
• Toilets work• Sinks work• Heating, electrical• Light switches, outlets
• Be cognizant of damage – especially to bank owned foreclosures
A Complete Guide to FHA Purchase Loan Options
Down Payment and Closing Costs
• 3.5% Down payment required– 100% of down payment may be a gift
• Gift funds can be from relative, employer, government grant– No expectations of repayment– No liens against property
• Can use community seconds– City, State, Federal down payment assistance
programs ok– Will allow up to 100% of purchase price with
approved secondary financing
A Complete Guide to FHA Purchase Loan Options
Down Payment and Closing Costs
• May receive up to 6% of purchase price from seller– Can be used to cover closing costs– Can be used to “buy down” interest rate– Can not be used for down payment
• Buying down the interest rate– Ability to pay upfront fees to permanently reduce
interest rate– Significant long term savings
• May have challenges asking for max in competitive offer environments
A Complete Guide to FHA Purchase Loan Options
Mortgage Insurance
• FHA Loans require 2 types of Mortgage Insurance Premiums - MIP
– Upfront Mortgage Insurance Premium• 1.75% of Loan Amount• Can be financed into loan amount
– Monthly Mortgage Insurance Premium• .55% of Loan Amount• Included in monthly payment• Included on mortgage statement
A Complete Guide to FHA Purchase Loan Options
Mortgage Insurance
• Calculating your UFMIP Payment - Example– $200,000 Purchase Price x 96.5%
• $193,000 base loan amount– $193,000 x 1.75% = $3,377.50 add to base
• $196,377.50 is financed loan amount
• Calculating your MIP Payment - Example– $200,000 Loan amount x .55% = $1,100
Divided by 12 = $91.67 MIP
A Complete Guide to FHA Purchase Loan Options
Only use an FHA Approved lender!
• Many illegal “Branch” companies that are not approved to originate FHA loans
• Check official HUD website for approval status of lender - will provide link on site
• “Red Flags” include – a different company name and/or address on page 3 of loan application.
$7,500 Federal Tax Credit
• No-interest loan paid back over 15 years
• Must purchase on or before July 1st, 2009– Between April 8th, 2008 and July 1st , 2009
• Must be first time home buyer– Can not have owned in past 3 years
• 10% of purchase price up $7,500
• $7,500 - Married filing joint or Single taxpayer
• Married filing separate $3,750
$7,500 Federal Tax Credit
• Home bought in 2008 can be claimed on 2008 returns
• Home bought in 2009 can be claimed on 2008 (or amended 2008) return
• Income limit is $150,000 for married couple– Phase out maximum is $170,000
• Income limit is $75,000 for single taxpayer– Phase out maximum is $95,000
• Loan is paid back in 15 equal installments– First payment paid in the 2010 tax year
$7,500 Federal Tax Credit
• You would be ineligible for Tax Credit if:– Your income exceed the phase-out range– You buy your home from a close relative. This
includes your spouse, parent, grandparent, child or grandchild
– You stop using your home as your main home– You sell your home before the end of the year– You are a nonresident alien– Your home financing comes from tax-exempt
mortgage revenue bonds - CalHFA– You owned another main at any time during the
three years prior to the date of purchase
A Complete Guide to FHA Purchase Loan Options
Wrap up and Take Aways
– We are a direct Lender that specializes in FHA Refinance, Streamline and Purchase loans.
– We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, VA, Conventional and Jumbo Loans
– We are more than happy to be your “second opinion” if you are already working with someone
– We are committed to educating and empowering homeowners - Join us for future classes
A Complete Guide to FHA Purchase Loan Options
Wrap up and Take Aways
– You will receive a “Thank you” email with links to the information we’ve talked about here today
• Copy of power point presentation• Link to search HUD approved lenders• Link to search MSA Loan Limits• Dream Home Finder request• Secure on-line FHA loan application• Links to tools and resources we talk about in
all of our classes• A schedule of all upcoming classes
Upcoming Home Buyer Classes
• A Complete Guide to Buying Foreclosures and Short Sales
• A Complete Guide to Closing Costs and the Good Faith Estimate
• A Complete Guide to the CalSTRS 80/17 Home Purchase Program
• A First Time Home buyer’s Complete Guide to Credit and Qualifying
• A Complete Guide to the CalPERS Home Loan Program – No down option
Check back often for upcoming classes
Thank you for Attending
You input is ValuablePlease complete 2 question
survey when you log off
Presented By:Broadview Mortgage Corp.
Presenter:
Scott Schang
Contact Information:
Phone: [email protected]