Big Changes with Fannie Mae are Here
There are several big changes with Fannie Mae this year (& last):
1. As of Dec 2014, Fannie Mae will offer 3% down (97% LTV) Conventional financing.
Why not just go FHA you say...?
- Remember that with FHA loans, the FHA MIP (Mortgage Insurance) is for the life of the FHA loan! Conversely, conventional PMI (Private Mortgage Insurance) may be eliminated when the equity target is reached (usually above 20%). This means, that a borrower may not be required to refinance out of their mortgage insurance at a later date, risking a potentially higher interest rate in the future.
- Also, traditional FHA loans come with an upfront FHA funding fee & higher monthly mortgage insurance cost.
..... which leads us to #2....
2. FHA has reduced their Monthly Mortgage Insurance from 1.35% to .85% oN FHA loans.
Despite that seemingly small difference, this has a fairly large affect.
Marcel Deitrich, Senior Loan Officer with Starkey Mortgage offered the following on the affect this has on a $250,000 FHA buyer:
What does this mean to the average FHA Buyer at $250,000? It means a month ago, on a $250K FHA purchase, their monthly MI was $269.23. When the change is implemented, it would drop the monthly MI to $169.52. That is $99.71 in savings on a monthly bases. This compares a $2,019.48 monthly PITI to a new $1919.77 monthly PITI.
- OR - If a buyer was in their comfort range with a $2,019.48 monthly payment, at that same payment, they can increase their purchase price to $265,000.
This is a huge step to putting FHA loans back in the game. - Marcel Deitrich - 972-672-3246 - NMLSR #231135
3. FHA Loan limits for Collin, Denton, Dallas, & Tarrant counties have been increased to $310,500.
