What Makes a Good Mortgage Applicant

Came across this article and felt it was timely – being in the summer swing Real Estate Market…  

What Makes a Good Mortgage Applicant

Lenders use specific criteria to determine whether applicants qualify for a mortgage and what the terms of the loan should be. The Motley Fool highlights several metrics lenders value the most when it comes to approving borrowers for a loan.

How does your client’s income compare to the amount they want to borrow?

Many lenders believe housing costs—which also include property taxes and homeowners insurance—should be less than 28 percent of a person’s income. Lenders may allow borrowers with less debt to take on larger mortgages.

What is your client’s debt load?

Many lenders consider the maximum debt-to-income ratio to be between 36 percent and 43 percent. Lenders expect total debts—which include the cost of the mortgage, other housing expenses, and unpaid debts—not to exceed that percentage. Otherwise, a borrower may not get approved for a loan.

Does your client have good credit?

Lenders will look at your client’s credit score to determine whether they’re a responsible borrower. People with credit scores higher than 740 often get the most favorable mortgage terms. A credit score below 620, on the other hand, could result in the denial of a mortgage. Some subprime lenders may be willing to lend to a borrower at a higher interest rate. But your clients might be better off taking steps to improve their credit and qualify for a more favorable loan, experts say.

What’s your client’s employment situation?

Borrowers who have been employed for only a short time at their most recent job or who have a history of changing jobs frequently may be a red flag for lenders. Many want to see two years of steady income on a borrower’s financial record.

believe Home Ownership is key to long term financial health.  We all need a place to live and fixing that cost over the long term is so important.  Saving for the downpayment is a journey I too am going on.  Maintaining a healthy credit score, cutting down costs and increasing saving each much is part of my regular diet – so I wanted to take a moment and share this article since it was short and concise.  If you are considering a purchase, The Caton Team is happy to sit down with you and map out the way.  Contact us any time – Info@TheCatonTeam.com

– Sabrina 

I read this article at: http://realtormag.realtor.org/daily-news/2017/06/14/what-makes-good-mortgage-applicant?tp=i-H43-Bb-Eg-32lY-1p-EHi7-1c-31VF-kLfrQ&om_rid=725620%20&Om_ntype=RMOdaily&om_mid=910

Remember to follow our Blog for the local real estate beat, a pulse on the San Francisco Peninsula at: https://therealestatebeat.wordpress.com

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office: 650-365-9200

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Effective. Efficient. Responsive.  What Can The Caton Team Do For You?

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

The Big Down Payment Myth

The Big Down Payment Myth

 

Having the spare capital to put 20 percent down on a home purchase is great, but it’s certainly not the norm. Still, many people think it is and that belief may be holding some would-be home buyers back, particularly young adults.

Indeed, 39 percent of non-owners say they believe they need more than 20 percent for a down payment on a home purchase. Twenty-six percent believe they need to put down 15 to 20 percent, and 22 percent say they need a down payment of 10 percent to 14 percent to buy, according to the National Association of REALTORS®’ 2017 Aspiring Home Buyers Profile report.

But now for the reality: The average down payment on a purchase mortgage was just 11 percent in 2016. And that’s just the average; often times down payments are much lower. For borrowers under the age of 35, the average down payment was just under 8 percent, according to NAR’s survey.

As such, “aspiring first-time buyers think it takes twice as much to buy a home than it really does,” writes Jonathan Smoke, realtor.com®’s chief economist, in his latest column.

How much a person truly needs for a down payment depends on their situation. Their financial circumstances, home location, and the price of the home are important factors.

But there are many mortgage options that offer the opportunity to make low or even no down payments. For example, the Department of Veterans Affairs and the U.S. Department of Agriculture offer no-money down loans to those who are eligible. In 2016, 16 percent of buyers under the age of 35 put no money down on their home purchase.

Further, the largest share of loans for buyers under age 35 last year were for people putting down less than 5 percent on a home purchase (or about $3,500). The 3 percent down payment programs backed by Fannie Mae and Freddie Mac, and the 3.5 percent FHA mortgage that primarily targets first-time buyers, are both helpful programs to consider. These loan programs don’t require unblemished credit either. The average FICO score was 713, but realtor.com® notes borrowers with a 639 were still getting approved.

As such, Smoke says the millennial dreaming about homeownership needs to get this message: They need a FICO score of at least 639 and enough for a 5 percent down payment (that is, if they don’t qualify for the other programs with lower payment options). In that case, they’ll need to save about $3,500 to buy in the typical American town.

 

I read this article at: http://realtormag.realtor.org/daily-news/2017/02/15/big-down-payment-myth?om_rid=AACmlZ&om_mid=_BYpJckB9YecvKz&om_ntype=RMODaily

 

Remember to follow our Blog for the local real estate beat, a pulse on the San Francisco Peninsula at: https://therealestatebeat.wordpress.com

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

HomeSnaphttp://www.homesnap.com/Sabrina-Caton

Visit our Website at:   http://thecatonteam.com/

Visit our INSTAGRAM page: http://instagram.com/thecatonteam

PINTREST: https://www.pinterest.com/thecatonteam/

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YELP us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or YELP me: http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Twitterhttps://twitter.com/TheCatonTeam

Connect with us professionally at LinkedIn: https://www.linkedin.com/in/sabrinawendtcaton

https://www.linkedin.com/in/susancatonrealtor

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Effective. Efficient. Responsive.  What Can The Caton Team Do For You?

 

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

Consumer Confidence in Housing Hits All-Time High

Consumer Confidence in Housing Hits All-Time High

 

WASHINGTON, DC – The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased by 5.6 percentage points in February to 88.3, a new all-time high. Five of the six components that comprise the HPSI were up, and three hit record highs. The net share of Americans who reported that now is a good time to buy rose 11 percentage points, while the net share who believe that now is a good time to sell rose 7 percentage points. Consumers also demonstrated greater confidence about not losing their jobs, with the net share rising 9 percentage points. On net, the share of respondents reporting that their household income is significantly higher than it was 12 months ago increased 4 percentage points. Additionally, more Americans expect home prices to go up, with the net share rising 3 percentage points. The net share of those who think mortgage rates will go down over the next 12 months remained unchanged for the third consecutive month.

“The latest post-election surge in optimism puts the HPSI at its highest level since its starting point in 2011. Millennials showed especially strong increases in job confidence and income gains, a necessary precursor for increased housing demand from first-time homebuyers,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Preliminary research results from our team find that millennials are accelerating the rate at which they move out of their parents’ homes and form new households. However, continued slow supply growth implies continued strong price appreciation and affordability constraints facing millennials and first-time buyers in many markets.”

HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS

Fannie Mae’s 2017 Home Purchase Sentiment Index (HPSI) increased in February by 5.6 percentage points to 88.3. The HPSI is also up 5.6 percentage points compared with the same time last year.

  • The net share of Americans who say it is a good time to buy a house rose 11 percentage points to 40%, rebounding strongly from last month’s survey low.
  • The net percentage of those who say it is a good time to sell increased by 7 percentage points to 22%, reaching a new survey high.
  • The net share of Americans who say that home prices will go up increased by 3 percentage points in February to 45%.
  • The net share of those who say mortgage rates will go down over the next twelve months remained constant for the third consecutive month at -55%.
  • The net share of Americans who say they are not concerned about losing their job rose 9 percentage points to a new survey high of 78%.
  • The net share of Americans who say their household income is significantly higher than it was 12 months ago rose 4 percentage points to 19% in February, continuing the increase from January and reaching a new survey high.

ABOUT FANNIE MAE’S HOME PURCHASE SENTIMENT INDEX

The Home Purchase Sentiment Index (HPSI) distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey® (NHS) into a single number. The HPSI reflects consumers’ current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making. The HPSI is constructed from answers to six NHS questions that solicit consumers’ evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.

ABOUT FANNIE MAE’S NATIONAL HOUSING SURVEY

The most detailed consumer attitudinal survey of its kind, Fannie Mae’s National Housing Survey (NHS) polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). As cell phones have become common and many households no longer have landline phones, the NHS contacts 60 percent of respondents via their cell phones (as of October 2014). For more information, please see the Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future. The February 2017 National Housing Survey was conducted between February 1, 2017 and February 21, 2017. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

DETAILED HPSI & NHS FINDINGS

For detailed findings from the February 2017 Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com. Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results.

 

I read this article at: http://www.fanniemae.com/portal/media/corporate-news/2017/february-home-purchase-sentiment-index-6527.html

Remember to follow our Blog for the local real estate beat, a pulse on the San Francisco Peninsula at: https://therealestatebeat.wordpress.com

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

HomeSnaphttp://www.homesnap.com/Sabrina-Caton

Visit our Website at:   http://thecatonteam.com/

Visit our INSTAGRAM page: http://instagram.com/thecatonteam

PINTREST: https://www.pinterest.com/thecatonteam/

Visit us on FACEBOOK:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

YELP us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or YELP me: http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Twitterhttps://twitter.com/TheCatonTeam

Connect with us professionally at LinkedIn: https://www.linkedin.com/in/sabrinawendtcaton

https://www.linkedin.com/in/susancatonrealtor

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Effective. Efficient. Responsive.  What Can The Caton Team Do For You?

 

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

HUD Lowers FHA MIP by a Quarter Point

HUD Lowers FHA MIP by a Quarter Point

 

This article was published on 1.9.17 – things may have changed by the time this blog posts.

 

Mortgage insurance premiums on FHA-backed loans will be lower by 25 basis points on loans endorsed starting January 27, the federal government announced today.

“After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families,” Julian Castro, secretary of the U.S. Department of Housing and Urban Development, announced today.

NAR President Bill Brown praised the move. “Dropping mortgage insurance premiums will mean a lot more responsible borrowers are eligible to purchase a home through FHA,” he said. “That puts more money in the fund to protect taxpayers, and it puts more families in homes so they can live out the American dream.”

The new premium schedule, which takes effect for residential mortgage loans that have an insurance endorsement date on or after January 27,  is expected to save the average home buyer $500 a year in insurance costs.

In its announcement, HUD said the reduced premiums reflect the healthy state of HUD’s mutual mortgage insurance fund, which is the agency’s principle fund for insuring FHA mortgages. “We’ve carefully weighed the risks associated with lower premiums with our historic mission to provide safe and sustainable mortgage financing to responsible homebuyers,” said Edward Golding, HUD principal deputy assistant secretary for housing. “This conservative reduction in our premium rates is an appropriate measure to support [home buyers] on their path to the American dream.”

Under the new schedule, a home purchase with a base loan amount of up to $625,000, with an 85-percent loan-to-value ratio and a 30-year loan term, will require an annual mortgage insurance premium of 55 basis points, down from 80 basis points.  A 15-year loan of that same amount and with a 90-percent LTV ratio will require an MIP of 25 basis points, down from 45. Access the full schedule.

NAR is calling on FHA to take even more steps to help home buyers, including eliminating FHA’s “life of loan” mortgage insurance requirement, which forces borrowers to maintain mortgage insurance regardless of their equity position. Borrowers with traditional mortgage insurance can typically extinguish their mortgage insurance once they reach 20 percent equity in the property. “Our work continues, but we’re encouraged by today’s announcement,” Brown said.

 

I read this article at: http://realtormag.realtor.org/daily-news/2017/01/09/hud-lowers-fha-mip-quarter-point?om_rid=AACmlZ&om_mid=_BYdA7tB9XEhzLd&om_ntype=RMODaily

Remember to follow our Blog for the local real estate beat, a pulse on the San Francisco Peninsula at: https://therealestatebeat.wordpress.com

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

HomeSnaphttp://www.homesnap.com/Sabrina-Caton

Visit our Website at:   http://thecatonteam.com/

Visit our INSTAGRAM page: http://instagram.com/thecatonteam

PINTREST: https://www.pinterest.com/thecatonteam/

Visit us on FACEBOOK:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

YELP us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or YELP me: http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Twitterhttps://twitter.com/TheCatonTeam

Connect with us professionally at LinkedIn: https://www.linkedin.com/in/sabrinawendtcaton

https://www.linkedin.com/in/susancatonrealtor

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Effective. Efficient. Responsive.  What Can The Caton Team Do For You?

 Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

Low Down Payment Loans Are Back

One of the biggest hurdle I see – is saving up for the 20% down payment for a home loan.  And with the cost of housing in the Bay Area – that 20% is a very pretty penny.  In fact, it seems almost impossible for some to even fathom how to save that much.  So the prospect of a low down payment could help get buyers into the market. Enjoy this article… 

Low Down Payment Loans Are Back

A feature of the housing crisis is back.

Just because you haven’t saved up enough for a 20% down payment—or even 10%—doesn’t mean you’re locked out of the housing market.

In 2015, 26% of loans for home purchases were made with down payments of less than 10% of the home’s value, according to data released Thursday from RealtyTrac. That’s a 10% increase from 2014. In fact, the number of home owners who purchased homes with low down payments has been steadily increasing for the past five years.

The uptick is due in large part to a reduction in the cost of mortgages offered by the Federal Housing Administration, which underwrites loans to borrowers with subpar credit. While critics worry that a surge in low-money-down lending could set the stage for a reprise of the housing bubble, market watchers say the most important result of the change is to make homeownership a more realistic goal for many people, especially first-time buyers. In recent years, there has also not been a significant difference in the number of people who default on low-down-payment loans as opposed to those with higher down payments, according to data from the Urban Institute.

“Low-down-payment lending isn’t synonymous with risky lending,” says Nikitra Bailey, executive vice president of external affairs at the Center for Responsible Lending.

Read Next: What Mortgage Is Right for Me?

Indeed, the FHA has always offered loans with down payments as low as 3.5% to qualified buyers.

Still, there are considerations if you’re thinking about going that route. For one, it means you’ll have less equity in the home. You’ll also need to pay for private mortgage insurance, required for loans with down payments of less than 20% to guard against the risk of default.

If you’re looking to become a homeowner but can only afford to put a small amount down, here are a few more things to keep in mind:

  • Talk to a certified credit counselor, Bailey says. An adviser can walk you through your finances and help you decide if you’re in a position to buy a home despite not having a lot of savings built up. The U.S. Department of Housing and Urban Development also sponsors housing counseling agencies nationwide; you can find a list state-by-state directory here.
  • Keep in mind the cost of private mortgage insurance, which is required for anyone buying a home with a down payment of less than 20% of the value of the home. Add that on top of monthly mortgage premiums (and the higher interest rates you’ll likely pay when you put down less money), and in the long run taking out an FHA loan with a low down payment could be more expensive than paying 20% upfront. Additionally, the agency now also requires that certain borrowers pay insurance for the entire term of the mortgage, unless they refinance.

Make sure you’re able to set aside at least 1% of the house’s value in cash, in case you need to tap into it for maintenance or emergency repairs, says Mark Calabria, director of financial regulation studies at the Cato Institute. And of course, be prepared for unforeseen financial challenges in your own life: For instance, if you were to lose your job, you’d ideally want to have enough savings to cover six months of mortgage payments.

I read this article at: http://time.com/money/4218298/buy-home-low-down-payment/

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

Visit our Website at:   http://thecatonteam.com/

VISIT OUR INSTAGRAM PAGE: http://instagram.com/thecatonteam

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

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Or Yelp me: http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Connect with us professionally at LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

 

Lenders Sniff Out Borrowers’ ‘White Lies’

Oh – I had to share this article from Daily Real Estate News.  Honesty is always the  best policy!

Lenders Sniff Out Borrowers’ ‘White Lies’

 

Borrowers who aren’t as forthcoming on their loan applications on certain items – such as occupancy status – may feel like it’s harmless, but lenders say such “white lies” constitute fraud.

Occupancy fraud is one of the most common lies from borrowers on mortgage applications. Lenders want to know if borrowers intend to actually live in the house they’re purchasing or whether it’s a primary, second, or investment property. If the home isn’t a primary residence, the person’s chance of default tends to be higher.

Borrowers who are dishonest are committing occupancy fraud.

“People will try to get an owner-occupied loan as opposed to an investment property loan because you can get a higher loan-to-value, meaning a lower down payment, on a primary,” says John T. Walsh, the president of Total Mortgage Services in Milford, Conn. “And you’re going to get a better interest rate on an owner-occupied.”

For example, a down payment on a primary residence could be as low as 3 percent while a loan for a single-family investment property could be at least a 15 percent down payment, Walsh says. What’s more, the interest rate could be as much as half a percentage higher, he notes.

Occupancy fraud comprised 19 percent of all mortgage misrepresentation on loans backed by Fannie Mae in 2013, the latest data available.

“Occupancy fraud is costly to lenders because it can raise the default rate and the risk that, if a fraudulent loan is exposed, the loan investor (like Fannie Mae) could require the lender to buy back the loan,” The New York Times reports.

Lenders are getting better at catching false occupancy claims, looking for such red flags as borrowers who have mortgage applications pending elsewhere or who have an unusually long commuting distance between their property and place of employment.

Many people think lying about occupancy is “the white lie of mortgage fraud,” Tim Coyle, the senior director for financial services at LexisNexis Risk Solutions, which develops risk mitigation tools for banks. “But it’s extremely costly to the banks and financial institutions.”

Source: “White Lies’ on Mortgage Applications Are Costly to Lenders,” The New York Times (June 5, 2015)

 

I read this article at: http://realtormag.realtor.org/daily-news/2015/06/12/lenders-sniff-out-borrowers-white-lies?om_rid=AACmlZ&om_mid=_BVex4kB9Cpzh$V&om_ntype=RMODaily

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

Visit our Website at:   http://thecatonteam.com/

VISIT OUR INSTAGRAM PAGE: http://instagram.com/thecatonteam

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

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Connect with us professionally at LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

FHA mortgage insurance premiums – going down

Earlier this year, President Obama announced that HUD will lower its FHA mortgage insurance premiums by 50 basis points, from 1.35 percent to .85 percent, effective Jan. 26.  This move will make it easier for hundreds of thousands of home buyers to get a mortgage and provide greater access to homeownership for historically underserved groups and credit-worthy families.  On a $300,000 loan, that could mean a savings of $1,500 a year.

 

The annual mortgage insurance premium for most FHA transactions has been reduced. What does this mean for you?

· Monthly savings: borrowers can purchase a home with the lowest possible total monthly mortgage payment. For those with an LTV greater than 95% or high credit scores, FHA financing will provide a lower total monthly mortgage payment than conventional loans with private mortgage insurance.

· Repeat homebuyers are eligible for high LTV financing: conventional loans with private mortgage insurance restrict LTVs greater than 95% to first-time homebuyers. Alternatively, FHA financing is available for first-time homebuyers and repeat principal-residence purchasers with LTVs up to 96.5%.

· Qualify more buyers : A lower total monthly mortgage payment results in a lower DTI ratio, potentially allowing more borrowers to qualify for mortgage financing.

· Afford more home: You may be able to purchase a more expensive property without increasing their total monthly mortgage payment.

· Refinance savings: Clients who have recently purchased a home with FHA financing may be eligible to refinance their mortgage and lower their total monthly mortgage payment for immediate savings.

 

This is great news for homebuyers!   Call us for more information!

 

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008