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This has no bearing on what really happened.
1) Existing mortgages are not affected.
2) Rates did not increase because of it
3) A planned decrease in the mortgage insurance rate on future mortgages has been stopped. The mortgage insurance rate remains the same it does not increase.
4) You don't have to be wealthy to not get an FHA loan. You have to save up for a down payment and have good credit.
5) I think the actual decrease was much less than 6/10 of 1%. 6/10 of 1% of the 200,000 in the example is 1,200.
6) I don't remember the number but I think it was .25%.
7) Not mentioned in the post was the increase was reportedly done at the last minute without letting the Trump transition team know.
As far as #4 is concerned, that's true. When my wife and I got married we wanted to buy a condo in the metro-NY area. We didn't have enough saved to put 20% down (keep in mind, prices in this area are sky high) so we got approved for a FHA loan, 5% down and PMI. Our credit score is excellent and our income sufficient. We saved enough money to put the additional 15% down within 2 years to remove the PMI.
I have no problem with FHA loans, but people that can't afford loans or have credit issues shouldn't be buying houses.
But if it was going to be reduced and he stopped it that is technically an increase.
If your boss told you that you were getting a raise in a month and then the new boss came in and scratched your pay increase you wouldn't say your new boss did nothing to your pay.
He decreased your pay.
It's semantics but politicians do this all the time. Bush made tax cuts and when it was time to go back to the previous rate everyone called it a tax hike.
It is NOT semantics it is SPIN. If something doesn't move it's done NOTHING, zippo,nada. It hasn't gone up or down it's done NOTHING.
No semantics at all just partisan SPIN...
The OP's original post is so far off, I think everyone has already adequately disputed the contents. The clearest explanation of what occurred is in this opinion piece. Forget for a moment it is from a conservative POV, the facts, the timing, the requirements are in fact, correct. http://conservativepapers.com/news/2...pmi-reduction/
If credit is not an issue, why are folks not taking advantage of a low down payment conventional loan? Besides 3% down options, there are also 5% down programs. Get the seller to pay 1.5% of your closing costs to come up with the additional 1.5%. I am having a real tough time buying into FHA is the only option, especially with a credit score of 801.
Nothing was taken away from anyone because it never went into play. There are so many problems with what is in the MIP funding calculations, from the accounting to appropriations. For example, most do not know that .25% of the MIP is siphoned off for Section 8 housing, which HUD calls multi-family housing. There's no simple answer, but forcing someone to refinance in order to shed the MIP (on the more recent closed loans) is crazy......If need be, lower the threshold, but being there for life makes no sense.
FHA has looser qualification guidelines according to my mortgage person, that is why it's talked about so much.
FHA does have a looser qualification. While most standard loan require a credit score of over 720 for the best rate, FHA requires a score over 580. That is a huge difference.
Anyone with a FHA loan will not see increase in payments as the deduction in Insurance premiums never took effect. I also believe the deduction in insurance premium on these loans were only for future loans and not loans that already funded.
These companies push people because they make a percentage off the sale. My lending agent made 3% off the mortgage and she got paid at closing. That's an $8,400 paycheck. What happens after that is of no concern to her.
We were told that we were approved up to $350k, but if we needed more she would up that to $375k. We knew from our budget that we would be squeaking by at $350k and immediately turned that down. Instead we looked for something that we could put a 20% down payment on, and that we could pay the mortgage on with 1 of our paychecks. That left us with an extra $700 in the bank each month that we would have otherwise spent on a mortgage if we were reckless.
A lot of people hear that they are approved for a number and immediately think "We can get a bigger and nicer house!" and let that emotion control their decision.
FHA does have a looser qualification. While most standard loan require a credit score of over 720 for the best rate, FHA requires a score over 580. That is a huge difference.
Anyone with a FHA loan will not see increase in payments as the deduction in Insurance premiums never took effect. I also believe the deduction in insurance premium on these loans were only for future loans and not loans that already funded.
You can get a Conventional loan down to 620 and the FHA loans which are in the 580-619 window do have stricter criteria than scores above 620.
FHA loans do typically have looser criteria than Conventional loans. The MI is tied to credit more on Conventional loans so MI on FHA loans will sometimes be cheaper. FHA loans do allow for a larger seller concession than Conventional loans with lower down payments. Also in high cost areas you can go to a lower down payment on highet loan amounts than on a Conventional loan.
The OP's original post is so far off, I think everyone has already adequately disputed the contents. The clearest explanation of what occurred is in this opinion piece. Forget for a moment it is from a conservative POV, the facts, the timing, the requirements are in fact, correct. http://conservativepapers.com/news/2...pmi-reduction/
If credit is not an issue, why are folks not taking advantage of a low down payment conventional loan? Besides 3% down options, there are also 5% down programs. Get the seller to pay 1.5% of your closing costs to come up with the additional 1.5%. I am having a real tough time buying into FHA is the only option, especially with a credit score of 801.
Nothing was taken away from anyone because it never went into play. There are so many problems with what is in the MIP funding calculations, from the accounting to appropriations. For example, most do not know that .25% of the MIP is siphoned off for Section 8 housing, which HUD calls multi-family housing. There's no simple answer, but forcing someone to refinance in order to shed the MIP (on the more recent closed loans) is crazy......If need be, lower the threshold, but being there for life makes no sense.
Oh, to be clear, my score is 801 now. When I bought it 6 years ago, it was somewhat lower, just under 700, IIRC. Sorry for the confusion.
Also, to answer your question, after 2008/2009, mortgages were no longer being handed out like candy to anyone breathing as in previous years, so 3% or 5% conventionals were virtually non-existent, as far as I know. Someone else may know differently.
Oh, to be clear, my score is 801 now. When I bought it 6 years ago, it was somewhat lower, just under 700, IIRC. Sorry for the confusion.
Also, to answer your question, after 2008/2009, mortgages were no longer being handed out like candy to anyone breathing as in previous years, so 3% or 5% conventionals were virtually non-existent, as far as I know. Someone else may know differently.
5% down Conventional loans stayed around, 3% Conventional generally went around for a bit though has come back slightly over the past couple years.
The stated income, stated docs, no doc and option arm loans which exploded in popularity around 2003 and 2004 died with the crash.
1985.....my first home loan was FHA....I was working two minimum wage jobs. I think minimum wage was around $3.85 then. House was $29,900. I had to meet with the guy that oversaw the program twice. He asked all sorts of questions. Finally said he was going to give me the loan since he believed I would do what I had to do to make the payments.
It wasn't always easy. My ex wife still lives in that house. LOL
We need better controls over the program. No question about that. Here is my problem. We bail the banks out with trillions of dollars of taxpayer money and Goldman Sachs gets caught committing fraud again and what do we do? Do we insist on shutting them down? I say we should. I certainly say that they are at the very least as big of a risk to the country than a low income home buyer.
Oh, to be clear, my score is 801 now. When I bought it 6 years ago, it was somewhat lower, just under 700, IIRC. Sorry for the confusion.
Also, to answer your question, after 2008/2009, mortgages were no longer being handed out like candy to anyone breathing as in previous years, so 3% or 5% conventionals were virtually non-existent, as far as I know. Someone else may know differently.
We got our current house in 2010 as I said almost at the bottom of the crash when "supposedly" loans were hard to get. They were still offering 3% loans as well as 100% USDA loans which shocked the heck out of me all things considered at the time. I did notice at the time most all of the real creative loans like Negative Amortization and 5/7-1 Interest Only went away.
Quote:
Originally Posted by pknopp
1985.....my first home loan was FHA....I was working two minimum wage jobs. I think minimum wage was around $3.85 then. House was $29,900. I had to meet with the guy that oversaw the program twice. He asked all sorts of questions. Finally said he was going to give me the loan since he believed I would do what I had to do to make the payments.
It wasn't always easy. My ex wife still lives in that house. LOL
We need better controls over the program. No question about that. Here is my problem. We bail the banks out with trillions of dollars of taxpayer money and Goldman Sachs gets caught committing fraud again and what do we do? Do we insist on shutting them down? I say we should. I certainly say that they are at the very least as big of a risk to the country than a low income home buyer.
And then came FICO scores onto the scene which changed everything...
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If something doesn't move it's done NOTHING, zippo,nada. It hasn't gone up or down it's done NOTHING.
