First-Time Buyers Face Rosier Prospects in 2015

Real Estate News

  |  

Jan 9, 2015 January 15th, 2015Jonathan Smoke

|  

By: Jonathan SmokeJanuary 15th, 2015 

  

Creatas/Thinkstock

It’s official: 2014 was the best year for total job growth since 2000. The housing market now has a confluence of several important demand-boosting factors that should make 2015 a big year for growth in home sales.
First, mortgage rates remain—at least for the time being—at near historic lows. The latest reprieve from higher rates is thanks to the bond market’s reaction to global economic concerns. Yet, as the jobs data indicate, the U.S. economy is on much better footing than the rest of the world.

Key factors for first-time buyers

But the key issue for first-time buyers has not been rates, which have been historically low for several years. Their employment situation, overall level of confidence, ability to qualify for credit and ability to afford the down payment have been the larger issues.
December data show that employment for younger households, in particular, has improved dramatically in the past year. For example, more civilian jobs for 25- to 34-year-olds were created in 2014 than in any other year since 1987.
Mortgage backers Fannie Mae and Freddie Mac clarified their credit qualification standards in the fall, which had been murky since 2009 legislation enacted in reaction to the housing bust. This should make it easier for many would-be home buyers to get a loan with slightly lower FICO scores and slightly higher loan-to-income and debt-to-income ratios.
The new low-down-payment programs announced in December from Fannie Mae and Freddie Mac will make conventional mortgages more accessible to first-time buyers.

con't.... http://www.realtor.com/news/first-time-buyers-face-rosier-prospects-in-2015

Average 30-year mortgage rate up to 4.12%

WASHINGTON (AP) – Sept. 12, 2014 – Average long-term U.S. mortgage rates rose slightly this week but remained near their lows for the year.
Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year loan edged up to 4.12 percent from 4.10 percent last week, where it had stayed for three straight weeks.
The average for a 15-year mortgage, a popular choice for people who are refinancing, rose to 3.26 percent from 3.24 percent.
At 4.12 percent, the rate on a 30-year mortgage is down from 4.53 percent at the start of the year. Rates have fallen even though the Federal Reserve has been trimming its monthly bond purchases, which are intended to keep long-term borrowing rates low. The purchases are set to end next month.
Mortgage rates often follow the yield on the 10-year Treasury note. The 10-year note traded at 2.54 percent Wednesday, up from 2.41 percent a week earlier. It was trading at 2.53 percent Thursday morning.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for a 30-year mortgage was unchanged from last week at 0.5 point. The fee for a 15-year mortgage also remained at 0.5 point.
The average rate on a five-year adjustable-rate mortgage rose to 2.99 percent from 2.97 percent. The fee was stable at 0.5 point.
For a one-year ARM, the average rate increased to 2.45 percent from 2.40 percent. The fee held at 0.4 point.
  Copyright © 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
 

FHA to eliminate “post payment” interest charges

WASHINGTON – Aug. 27, 2014 – The Federal Housing Administration (FHA) today announced that borrowers who prepay their FHA-insured mortgages will not have to make interest payments beyond the date their mortgage is paid in full.
FHA's rule, Handling Prepayments: Eliminating Post-Payment Interest Charges, applies for FHA-insured mortgages closed on or after Jan. 21, 2015. This rule explicitly prohibits lenders from charging borrowers post settlement interest, which is broadly defined as a "prepayment penalty" by the Consumer Financial Protection Bureau (CFPB), for all FHA Single Family mortgage products and programs.
In addition, FHA announced a new rule to ensure borrowers have early access to information when making decisions about their FHA mortgages. Effective for FHA-insured Adjustable Rate Mortgages (ARMs) originated on or after Jan. 10, 2015, this rule makes two revisions to FHA's ARM Program. It requires lenders:
″ To provide borrowers with FHA-insured ARMs at least a 60-day, but no more than 120-day, advance notice of an adjustment to their monthly payment. FHA currently requires a 25-day advance notice.
″ To base an interest rate adjustment that results in a corresponding change to the borrower's monthly payment on the most recent index value available 45 days before the date of the rate adjustment (commonly referred to as a "look back period"). FHA currently requires a 30-day look-back period.
The new rules result from regulations in the Truth-in-Lending Act (Regulation Z) as revised last year by the CFPB.
© 2014 Florida Realtors®
 

FHA Loan Types

Choose from Several FHA Mortgage Programs

Fixed Rate FHA Loan

An FHA loan benefits those who would like to purchase a home but haven't been able to put money away for the purchase, like recent college graduates, newlyweds, or people who are still trying to complete their education.

Adjustable Rate Mortgage (ARM)

The FHA adjustable rate mortgage is a HUD mortgage specifically designed for low and moderate-income families who are trying to make the transition into home ownership.

FHA Secure Refinance Loan

Many homeowners with adjustable rate mortgages find themselves in financial trouble because of current interest rate increases. FHA Secure refinancing can help when foreclosure is a threat.

FHA Reverse Mortgage

An FHA reverse mortgage is designed for homeowners age 62 and older. It allows the borrower to convert equity in the home into income or a line of credit.

Energy Efficient Mortgage

The FHA Energy Efficient Mortgage program helps current or potential homeowners significantly lower their monthly utility bills and incorporate the cost of energy efficient improvements into their mortgages.

Graduated Payment Mortgage

Graduated Payment Mortgages are FHA loans for home buyers who currently have low to moderate incomes but expect them to increase substantially over the next 5 to 10 years.

Growing Equity Mortgage

FHA Section 245(a) allows those who currently have a limited income, but expect that their monthly earnings will increase, to purchase a home with the help of a Growing Equity Mortgage in which payments start small and increase gradually over time.

FHA Loans for Condominiums

FHA condominium loans, sometimes called condo loans, are specifically designed toward those who purchase housing units in a condominium building.

Other Loan Types

Various loan options are available for those who prefer not to use the loans noted above. These alternatives include VA loans, conventional loans, jumbo fixed rate loans, among others.

Source: https://www.fha.com/fha_loan_types