October 1 is a big date in the FHA world, The Down Payment assistance piece has been beaten to death on the Rain, so this is just a quick mention that if you have them, GET THEM CLOSED.
The next piece is yet another change in the FHA Mortgage Insurance Premium: MIP.
If you have some one buying with an FHA loan and you are close to having a contract this can be an important one to save your clients some money. In July FHA changed its MIP to a more risk based premium. The benefit here was for our clients with good credit scores, or for "O.K." clients with a bigger down payment than typical for FHA. On a $200,000 loan your buyers can save $1,000 in upfront MIP if they get a case number in September, and the monthly premium will be lower by about $8/month.
Effective October 1the Up Front MIP will be a flat 1.75% for Purchase transactions. The monthly factor will vary between .50-.55 depending on the down payment.
If you have a loan in process it is important that you be sure that there is a lender case number on the file, especially if the credit score is above 640!
Some times it is the little things that can make a big difference in you buyers pockets. I know I just saved one of my buyers a small fortune by getting it in under the wire.
Have a great week, and remember to pay attention to the details!
Rob
Real Estate Mortgage Network
In this ever evolving world of guideline changes, it is important to stay on top of things to be sure your buyers can still qualify, and in this case, to be sure your buyers are getting the best possible deal.
Have a great day!
Rob
Thanks for the info and the post.
Lloyd Nichols
I'm attending an hour long meeting this morning to get lender updates. Seems like we have these meetings about once a month now with all the changes.
I still have a hard time understanding the angst over the higher MIP.
I remember when it was 2.25% across the board.
They are increasing the minimum down payment from 3% to 3.5% as well.
Thanks for the update as most ALL of my first timer are going the FHA route!
Thanks for the update. We need them now more than ever. The rules are changing.
Robert- yes it is important to get a case # assigned before 10/1. I just hope the scoring through DU/LP doesn't tighten in the near future.
Len, I remember the 2.25 days! but this is still an opportunity to save some money!
RHF: I just posted a blog on the Down Payment change as well, That is Jan 1. and you can still get away with a 2.25% down payment for the remainder of the year.
Keeping up with all of this for our buyers has become critical, and then explaining it to our buyers even harder to do.
Great advice for our buyers. Thanks for the information on saving or buyers some money.
Good advice to get those DAP loans closed! There is still time but the clock is ticking.