May 30th, 2012
• We are purchasing a new home. We want to go FHA, but we do have a question. The monthly mortgage insurance, does it adjust with the loan balance, or is it always the same? Also, how long do we have to keep it? The monthly mortgage insurance remains the same for as long as it has to be maintained. FHA requires you maintain the mortgage insurance for either 5 years or until your loan-to-value reaches 78%, whichever is longer.
• I am interested in purchasing a home, it needs some loving. I hear a lot about the FHA 203(k). I know there is a streamline and a full, what is the difference? Basically, the streamline is cosmetic and the full is structural.
• How do we know if we should consider paying points or not? When you talk about points, I reference this to buying down an interest rate. If you have seller paid closing costs and the extra money is there, do it. It is free money to you, and you either use it or lose it. If this is a cost you intend to bear, then we would look at the break even. In other words, compare your savings with the no points rate to determine if the savings is substantial enough to warrant the cost.
• We want to refinance, I do have VA eligibility, our existing loan is not VA. The problem is that we owe about what our home is worth. Everyone keeps telling us that we can only borrow 90% of the appraised value, is this true? Generally speaking, no, we have a program that allows you to refinance 100% of the appraised value of the property provided you are paying off existing debt. If there is enough room after appraisal to roll in closing costs, you can.
- Jennifer Keenan, Senior Mortgage Consultant, NMLS# 101837, Tidewater Home Funding 757-366-8690