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Changes to VA & USDA Funding Fees! Oct 1st 2011 – Still 100% Financing Available
This is my first blog and there has been many changes along life’s way and certainly in the lending industry.
Back in 2008 there were over 13,000 loan officer/mortgage brokers in Washington State. Now, we are under 4,000. It has a lot to do with all the lending and educational hurdles. The folks in this industry typically are full-time hard working professionals.
For all those people you knew who use to do loans, here is my advertisement.
I am still in business and would be happy to hear from you! Why would you call or want to do business with me??? Fair question. I can say this, after licking all my wounds from this crazy business, I am still standing! Why? Because I love this business.
Yes, it is now more difficult to do home loans but I am still doing them and having a great deal of success by educating the buyers and sellers along with my extensive follow-up.
I can definitely say that today’s real estate agents have been knocked around harder than we (lenders) have. The seller needs to sell even though the values have dropped. That is not a fun conversation to have! I get it! For those Realtors still doing business – good job! That will pay dividends as there is always ebb and flow, with the pendulum swinging too far left and then too far right but soon it settles in the middle and evens out. Okay to chuckle here…For those that are new in real estate that is all you know and for the veterans, you know the motto and creed: contacts, shake those hands and plenty of face time. That is what it is all about!
Now to address the title question: Yes, these are still 100% Financing – Zero Down Loans*
VA Funding Fees Are as Follows:
Purchase and Construction
| Loan Type | Down Payment | Active Duty Personnel / Veterans | National Guard / Reservists |
| Purchase & Construction | 0% | 2.15% Funding Fee | 2.40% Funding Fee |
| “ | 5% | 1.50% Funding Fee | 1.75% Funding Fee |
| “ | 10% | 1.25% Funding Fee | 1.75% Funding Fee |
All Other VA Home Loan Types (First Time Use)
| Loan Type | Active Duty Personnel / Veterans | National Guard / Reservists |
| Regular Refinance (including cash out) |
2.15% Funding Fee | 2.40% Funding Fee |
| Interest Rate Reduction (IRRL) Refinance |
0.50% Funding Fee | 0.50% Funding Fee |
| Native American Direct Loans | 1.25% Funding Fee | 2.00% Funding Fee |
| Manufactured Housing & Mobile Home Loans |
1.00% Funding Fee | 1.00% Funding Fee |
| VA Home Loan Assumptions | 0.50% Funding Fee | 0.50% Funding Fee |
Additional Use / Subsequent Use:
Purchase and Construction
| Loan Type | Down Payment | Active Duty Personnel / Veterans | National Guard / Reservists |
| Purchase & Construction | 0% | 3.30% Funding Fee | 3.30% Funding Fee |
| “ | 5% | 1.50% Funding Fee | 1.75% Funding Fee |
| “ | 10% | 1.25% Funding Fee | 1.75% Funding Fee |
All Other VA Home Loan Types (Other Than First Time Use)
| Loan Type | Active Duty Personnel / Veterans | National Guard / Reservists |
| Regular Refinance (including cash out) |
3.30% Funding Fee | 3.30% Funding Fee |
| Interest Rate Reduction (IRRL) Refinance |
0.50% Funding Fee | 0.50% Funding Fee |
| Native American Direct Loans | 1.25% Funding Fee | 2.00% Funding Fee |
| Manufactured Housing & Mobile Home Loans |
1.00% Funding Fee | 1.00% Funding Fee |
| VA Home Loan Assumptions | 0.50% Funding Fee | 0.50% Funding Fee |
The funding fee on VA Assumptions and Interest Rate Reduction Refinance Loans is currently 0.5%. This rate remains unchanged regardless of the number of times it is used.
VA funding fee must be paid within 15 days of closing or included in the loan amount.
Veterans whose entitlement is based on active duty will pay a 2.15% fee on their first VA loan and 3.30% on all future loans for the purchase of a home or cash-out refinances.
Veterans whose entitlement is based on Guard/Reserve service will pay 2.40% on their first loan and 3.30% on all future loans for the purchase of a home or cash-out refinances.
USDA – Not just for Beef! It is a loan too…. who would of guessed? Your Home Buyers????
New USDA Funding Fee Changes:
For the first time in the history of USDA, the Single Housing Guaranteed Loan Program has implemented an Annual Fee. The annual fee will be calculated based on the guaranteed loan amount and based on the average annual scheduled unpaid principal balance for the life of the loan.
Effective October 1, the upfront guarantee will decrease from 3.5% to 2% for purchase loans. The up-front guaranteed fee for refinance loan transaction will remain at 1 percent. In addition, an annual fee of .30 will be calculated when the loan is made and every 12 months thereafter until the loan is paid in full or no longer outstanding and the guarantee cancelled or expired.
Well I hope you enjoyed the reading, and if you made it this far you are still awake and ready to do some business!
Look forward to hearing from you.
David Haley
David Haley | Mortgage Loan Officer MLO-76555
Contact David Haley
425-471-6039
6100 219th St SW, Ste 480
Mountlake Terrace, WA 98043
www.DavidHaleyMortgage.com
Contact David Haley
425-471-6039
6100 219th St SW, Ste 480
Mountlake Terrace, WA 98043
www.DavidHaleyMortgage.com
FHA – Increase in Mortgage Insurance – No April Fools Joke!
April 1st of 2012 will not be a good April Fool’s joke – once again FHA has been looking at their overall solvency concerns and has deteremined they need to pass along the added costs to the new borrowers.
The UFMIP will be increased from 1 percent to 1.75 percent of the base loan amount. This increase applies regardless of the amortization term or LTV ratio. FHA will continue to permit financing of this charge into the mortgage. This change is effective for case numbers assigned on or after April 1, 2012. Example: Loan Amount = 100,000.00 new Upfront Mortgage Insurance Premium is 1.75% = 1,750.00 being financed into new loan.
The Temporary Payroll Tax Cut Continuation Act of 2011 requires FHA to increase the annual MIP it collects by 0.10 percent. This change is effective for case numbers assigned on or after April 1, 2012. FHA is also exercising its statutory authority to add an additional 0.25 percent to mortgages exceeding $625,500. This change is effective for case numbers assigned on or after June 1, 2012. UPDATE: Here is the HUD LINK
So for quick examples and here is the easiest equation. Take your loan amount 100,000.00 time new Monthly Mortgage Insurance Cost of 1.25% = 1,250.00 then divide this number by 12 to give you the Monthly Mtg Ins Premium Cost = 104.17 per month vs. the old MI factor of 1.15% = 1,150.00 / 12 = 95.83 per month.
Now these are all numbers based on if you are only putting the 3.5% minimum investment down for this type of loan.
Taken together, these premium changes will enable FHA to increase revenues at a time that is critical to the ongoing stability of its Mutual Mortgage Insurance (MMI) Fund, contributing more than $1 billion to the Fund, based on current volume projections through Fiscal Year 2013.
Should you have any questions please give contact me.
T. K.
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