FHA Mortgage Insurance Rates to Change

Effective April 1st, FHA will increase the Upfront Mortgage Insurance Premium from 1.00% to 1.75%. The Annual Mortgage Insurance Premium will change from 1.15% to 1.25% for loans greater than 95% of the sales price. For loans 95% or less of the sales price, the change will be from 1.10% to 1.20%.

The change was made by HUD (Housing and Urban Development) to increase the funds needed by HUD to operate. This will also increase the cost for buyers using the FHA loan program.

Please contact Ann Shipley at ann.shipley@mannmortgage.com or 503-385-1791 for further information.

Higher Credit Scores is the Norm Even at FHA

Figures compiled by the Department of Housing and Urban Development show that the average credit score on an FHA-backed single-family loan is now at 700.

Just 3.3% of FHA-insured loans originated in the third quarter went to borrowers with 580-619 credit scores. Back in 2009, nearly 20% of FHA borrowers had credit scores in the 580-619 range.

Lenders have many reasons for tightening their underwriting and credit standards: they are under heightened scrutiny because of the housing bust, secondary market buyers are slamming them with buying back loans they have originated that are considered "high risk", and there are multiple investigations into their servicing and lending practices.

How can you know if your credit will be a concern in getting qualified for a home loan? Please contact us at 503-385-1791 (Equity Loans) or visit us at www.equityloansoregon.com.

2011 Mortgage Interest Rates Ending Year Near Historic Lows

The average fixed interest rates for Conventional loans are ending the year near their all-time historic lows.

The average rate for a Conventional, 30-year fixed interest rate is 4.00%. In 2010, the year ended with an average rate of 4.875%.

Our interest rates as of today:

Conventional, 30-yr Fixed: 4.00%/APR 4.264%
FHA or Federal VA, 30-yr Fixed: 4.125%/APR 4.698%
USDA (Rural Housing), 30-yr Fixed: 3.875%/APR 4.321%

Interest rates quoted are for informational purposes only. Interest rates and loan programs can change without notice. All borrowers are subject to credit and property qualifications, and therefore, your interest rate may differ.

Please contact us at 503-385-1791 or visit us at www.equityloansoregon.com for further information.

Extension of the Mortgage Insurance Tax Deduction Uncertain

Numerous tax provisions, including the mortgage insurance tax deduction, will expire January 1st because Congress did not pass its annual tax extension bill before the lawmakers left town December 23rd.

The mortgage insurance tax deduction went into effect with new mortgage loans closed January 1 through December 31, 2006. Every year since then, Congress has passed the law extending the tax deduction for another year.

The law to make mortgage insurance tax deductible was to help homeowners make buying a home, with mortgage insurance in their monthly payment, more affordable. Just as mortgage interest can reduce a homeowner's tax bill to the government, the mortgage insurance tax deductibility does the same.

Stay tuned. . .

FHA Waives Flipping Rule Until End of 2012

The Federal Housing Administration (FHA) has suspended its anti-flipping rule for another year to facilitate the financing and sale of newly renovated foreclosed properties.

This extension is intended to accelerate the resale of foreclosed properties in neighborhoods struggling to overcome the possible effects of abandonment and blight.

The Department of Housing and Urban Development issued the anti-flipping rule in 2003 to protect FHA borrowers from investors who were quickly flipping properties at inflated prices.

The anti-flipping rule prohibits lenders from using FHA financing in transactions where a single-family property is being resold within 90 days of the investor purchasing the property.

For more information please contact us at 503-385-1791 or www.equityloansoregon.com.

Interest Rates as of 12/21/2011

Conventional, 30-yr Fixed: 4.25%/APR 4.573%
FHA/Federal VA, 30-yr Fixed: 4.00%/APR 5.452%
USDA, 30-yr Fixed: 4.00%/APR 4.768%

Interest Rates quoted are for informational purposes only. Interest rates and loan programs can change without notice. All borrowers are subject to credit and property qualifications, and therefore, your interest rate may differ.

Please cotact us at 503-385-1791 or visit us at www.equityloansoregon.com for further information.

Homebuyers Should Act Now, Mortgage Costs Will Rise

In 2008 Fannie Mae and Freddie Mac were placed under government control. The US Department of the Treasury in its report "Reforming America's Housing Finance Market" advocates increasing the market share of private mortgage lending companies and reducing the role of Fannie and Freddie - with the ultimate aim of winding both institutions down.

This will make it tougher for people to buy and finance homes. According to the report, "The government must also help ensure that all Americans have access to quality housing that they can afford. This does not mean our goal is for all Americans to be homeowners."

The exact changes will be hashed out in the upcoming months. However, it seems safe to assume that mortgage borrowing post-Fannie and Freddie will look something like this:

• FHA and other government-backed mortgages will be limited to the neediest segments of our society- those of low to moderate income.


• Private mortgage lenders will be taking care of the rest of us, working within the constraints of additional regulation and retaining more of the risk from the loans they originate.


• Fannie and Freddie will lower their loan limits and their market shares will decrease. Down payment and mortgage insurance requirements will increase.

Although outcomes are uncertain, it looks like financing a home in America without Fannie and Freddie will be tougher and more expensive. What it means today is that it may be smart for those who are interested in buying a home to start the process now.