The World of Mortgage Blog - According to Kimberly and Cathy

Refresher Tips and FHA Changes

Refresher Tips

 

1)      Watch out for homes that sell for over 20% increase from date of last sale.  Show proof of improvements with receipts.

2)      Watch out for homes that sell within 90 days of last recorded deed.

3)      Earnest Money Check:  if someone other than the person on title writes the EMA check, be sure to notify early on and obtain proper gift letter documents

 

FHA Changes:

 

1)      March 8^th – FHA ARM Margins decrease from 2.25% to 2%.  This is good.

2)      April 15^th – Monthly Mortgage Ins increases from .90% monthly to 1.15% on 3.5% Down Payment loans.  This means payments will increase about $30/month.

3)      FHA gave a ruling to allow certain rental restrictions on currently approved FHA Condo until they work out the guidelines.  This is good. 

 

Condo Update and Job Report!

****If you are involved in selling condos, be aware of this change*****

It has recently come to light that if the condo has ANY leasing restrictions AT ALL…Even if Condo is FHA approved. It will not be eligible for FHA condo financing. This means that there may not be any restrictions contained in the condominium by-laws or legal documents concerning rental units and restrictions to the homeowner concerning how the unit may be leased.  This includes, but is not limited to, restrictions against transient or hotel use, partial leases, etc.  This is based on a recent opinion received from HUD’s attorneys.

If you are listing a condo, double check the leasing restrictions prior to listing. If it has leasing restrictions – note that condo can’t be financed FHA because of this ruling. Contact us for alternative financing options.

 

*****Jobs Report may affect interest rates*****

Reports are continuing to show improving trend in the labor market. It's not only encouraging in terms of the housing market, but it’s important to recognize that as jobs continue to be created and the economy expands, rates will move gradually higher over time.

Rates: still at or below 5%, depending on program.