Rules announced in December by the Federal Housing Administration (FHA) have sped up the process of reviewing and approving many of the federal agency’s loans, according to Apartment Finance Today.

The rules changed the criteria for having market-rate construction and rehabilitation loans reviewed by FHA regional and national loan committees, so that loans for less than $25 million and fewer than 250 units are now exempt from the national committee review process. Previously, any loan for more than 150 units or $15 million had to be reviewed before approval.

According to the source, these reviews were slowing loan approvals significantly before the new rules were implemented. Some other changes were also made. One executive told the source a deal saved at least four to six weeks because of the change, allowing construction to begin.

Rental managers and property investors may want to keep an eye on these loans, since this change means that competing properties or investment opportunities might be begun and completed more quickly. The changes were made in response to the FHA’s increased role in industry lending.

photo credit: Tambako the Jaguar

Homeownership is a goal for the majority of Americans. Often the ins and outs of homeownership and mortgages are confusing and overwhelming. One area that can be quite confusing is private mortgage insurance (PMI). Many times new and potential homeowners have no clue what PMI is, who needs it, and if it is always necessary.

First, what is it? PMI is an insurance often required by mortgage lenders. Typically, to secure a loan a buyer must put 20% down on the loan. This makes homeownership an impossibility for many individuals. For those buyers who don’t have 20% to put down, lenders will usually require the buyer to purchase PMI to protect the bank in case the buyer defaults on the loan and the home goes into foreclosure.

Do I need it? As stated earlier, many times there will not be an option. If you only have 3% to 5% as a down payment then you won’t have a choice. You will be required to take out PMI, to cover the bank’s “riskier” investment and loan. The question of do I need it is quite complicated. If you think there is a chance you might default on the loan it could be handy to have, considering it covers the loss the bank will take in foreclosure. That won’t remove the foreclosure from your credit history but, it may allow you to come out of that foreclosure without an outstanding balance owing on a home you no longer have. On the other hand, not having it will lower your mortgage payment each month, making those payments easier to pay, keeping foreclosure at bay.

Should I cancel it? Once you have paid over 20% of the principal, you can select to cancel your PMI coverage, which will more than likely lower your payment, since PMI premiums are often included in the monthly mortgage payment. The decision is yours. You have to weigh the pros and cons before deciding to cancel but, make sure you pay attention to your principal paid and don’t forget to make the choice, when the time comes.

Lenders use a certain formula to determine how much they’re willing to lend you, but you can roughly count on three times your total annual income, before taxes. Of course this is just a rough estimate and a lot of other considerations will be evaluated first. And you don’t have to buy a home that falls in that price range, it’s not only allowed but in most cases you’re better off if you purchase a home that is less than the amount the mortgage lender approves you for.

Before you meet with a mortgage lender it is a good idea to get your credit rating in order, pay down your bills, and set aside a down payment.

The first step is checking your credit reports for any errors and cleaning up any black marks on your rating. The higher your credit rating the better.

Your next step is to pay down or off your debt. Mortgage lenders will look at your budget and your debt and use this to determine how much they’ll lend you so it really is a benefit to have as much debt paid off as possible.

And finally, having a down payment used to be optional or very minimal for home buyers but after the housing crisis that has changed and having a down payment can affect the interest rate you’ll be asked to pay.

Getting approved for a mortgage shouldn’t be an impulse decision, you need to prepare for your mortgage meeting so you can get the best deal possible on this huge investment.

photo credit:?tomeppy

• Try to keep your employment record as stable as possible. If you are the kind who regularly changes jobs – even if you are continuously employed for many years – then you are less likely to get an interest rate as low as somebody who has a solid history with only one or two employers.
• Save up as large a deposit as possible before you start looking for your mortgage. If you can bring a deposit of something like 20 or 25 per cent to a lender, they will look a lot more favourably on you than someone who only has a five per cent deposit. In some cases, it really might pay to wait a little longer and save a little more to then be blessed with a considerably lower interest rate which will save you a lot of money over the years of your loan.
• Do as much as you can to ensure your credit history is the best it can be. Obviously, this is a long term deal but do make sure you check into all the small things you can do to improve your credit rating.
• Don’t try to borrow beyond your means. If your “income to debt” ratio is low – that is, you can easily make your repayments out of your current income – then the lender will be more likely to give you a lower interest rate, trusting that you will be able to pay off the mortgage in full over time.

On the down side, not all mortgage brokers are actually going to help you out as much as you’d hope. They are not always as well-trained as you’d hope, may give you bad advice and may be inclined to direct you to particular lenders because they get some perk out of the deal. Additionally, you will often have to pay a percentage fee to your mortgage broker, so if they’re not getting you a better deal to compensate for this fee, you’re losing out.

However, on the plus side, if you find a good mortgage broker who gives you advice that really suits your situation, and has access to a wide range of lenders and loans, and can find a way to save you money on your repayments or loan fees, then you really can end up a lot better off. Particularly if your financial circumstances are a little complicated, they may be able to help you out to get a much better deal. They also handle the frustrating paperwork and communications with the bank or lender, which can take a lot of the hassles out of buying property.

In the end, you have to go with some instincts, and don’t be afraid to shop around to find a mortgage broker you feel comfortable with, or decide not to use one at all. After all, you are making one of the biggest investments of your life, and making a bad choice can have a big impact on your future.

photo credit:?woodleywonderworks

One of the big changes that we’ll be seeing is an end to the first time homebuyer tax credit. Not an entirely shocking announcement as this tax credit was so generous it was pretty clear that it would not be permanent.

Another change will be that the government’s purchase of mortgage backed securities will end. In 2008 almost all loans in the secondary market were bought by the government by stepping out of the market, mortgage rates are almost certain to rise, causing a whole slew of repercussions.

To make matters a little bit worse guidelines are being tightened on loans. The goal is to lessen defaults but it will ultimately mean fewer people can purchase a home and the qualifications will be more stringent.

Of course this is just the FHA’s announcement about their plan, it’s not a certainty at this point but it does seem fairly certain that things will go forward.

photo credit:?Kamal H.

How will you celebrate this auspicious occasion? Daydream about it for a moment – will you celebrate with a fancy meal at your favorite restaurant, or a party in the house that you now fully own? And it’s not only the one-off occasion of the day you make the final repayment – there is also all the time after that when you have this extra money available to you, now that it’s not going into the mortgage – what do you think you might do with it? Of course, some of it should be invested, but spoiling yourself with a couple of treats is a fair deal.

Sometimes we get bogged down in the everyday events of life and paying off the mortgage is just another one of the many chores we’re burdened with. Take a moment to remember that it won’t always be that way, and your day might get a bit brighter.

Look for Old Sales

Houses that sit on the market for more than three months are considered stale. It’s an old adage and really, logically, shouldn’t apply when the market is so slow but it does and it can mean a big deal for you. Look for homes that have been on the market for more than 90 days, the longer the better as the sellers are probably almost willing to accept any reasonable offer. You may find owners who are holding out for a price that is too high for the market, but this is the exception, not the rule.

Find the Discounts

Do the research (or have your realtor do it) and find homes that have already been discounted at least once and for a pretty big chunk. Typically these homes are a burden on the homeowners and paying the mortgage is getting to be too much so they’re looking to make a quick and easy sale.

Come Preapproved

Having a mortgage lender firmly in place and your loan amount preapproved is a big bonus, especially for sellers that are anxious to close the deal quickly. You suddenly are a known quantity and basically a sure thing as long as you’re happy with the inspection. This not only makes you more enticing to the seller but makes the process easier on? you as you know what to expect and how much you can actually afford.

But most of the time a Quit Claim Deed comes into play when there is a divorce and one person gives up their stake in a home to the other person. Typically if children are involved the primary custodian is allowed to keep the home but this isn’t always the case, just a common situation.

When you file a Quit Claim Deed you’re stating that you no longer wish to have any responsibilities or benefits that are tied to the property. This means that once the transaction is completed you will no longer have any say in what happens to the property and you cannot be expected to be responsible for anything that occurs to the home or on the property.

Read the fine print on a Quit Claim Deed before signing it, although they’re all basically the same, some people go into the process without really understanding that they’re giving up their current and future rights to the real estate.? photo credit:?woodleywonderworks

Mortgage Bank

This is the old fashioned way of getting a home loan, your local bank will process your loan application and determine if you are worth the risk. They will lend you the money but will then often sell that loan on the secondary market.

Mortgage Broker?

A mortgage broker is a go between who works with a variety of lenders and can help you find the loan that best suits your situation, then you’ll often work directly with that lender.

Internet Lenders?

The internet is full of mortgage lenders, some more scrupulous than others so it’s important to do your research. Some internet lenders are simply traditional outlets with an internet portal, some are strictly internet based companies.

Home Builders?

Many large home builders actually have loan offices within their companies or they have very close affiliations with mortgage brokers. Typically they offer some sort of deal for people who want to purchase their homes.

Real Estate Offices

Similar to the home builders above, some of the larger real estate companies have in-house mortgage departments that will make buying through them more enticing.

You can research all of these options on your own and come up with the best solution for you without using a mortgage broker and paying that added middleman expense, but it will take some time and effort on your part.