Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky FHA Loans and Conventional Mortgage Loans

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky FHA Loans and Conventional Mortgage Loans: 

What is the difference between Kentucky FHA Loans and Conventional Mortgage Loans?  You know that two of the most popular mortgage options a...

What is the difference between Kentucky FHA Loans and Conventional Mortgage Loans?

 You know that two of the most popular mortgage options available are FHA and Conventional, but you no doubt have some clients who need help understanding each loan type’s finer details and benefits. 

 Here’s a quick, simple three-bullet comparison that you can provide for your clients: 

 Low down payments: 

Both options feature low down payment options (eligible borrowers can put down as little as 3.5% for FHA and 3% for Conventional), but it can be easier to qualify for an FHA loan, as lower credits scores are accepted and there are less restrictive debt-to-income ratio requirements. 

Residence type: 

You can only use an FHA loan on a primary residence;  a Conventional mortgage can be used for primary homes, vacation homes, or investment properties.

 Mortgage insurance: 

Mortgage insurance is required on all FHA loans, regardless of down payment size. You can avoid paying private mortgage insurance on a Conventional loan if you have a 20% down payment. But if you don’t, PMI drops after you reach 22% of your home’s equity.

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Removing PMI on Kentucky Conventional Mortgage Loans

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Removing PMI on Kentucky Conventional Mortgage Loans: Removing PMI on Conventional Loans https://youtu.be/VVEl6hdZPRU Automatic  – Occurs when a borrower hits 78% LTV of the sch...

1. Automatic – Occurs when a borrower hits 78% LTV of the scheduled amortization. Cannot be used if borrower pays down balance to get to 78% faster than scheduled.
2. Borrower requested (original value) – Most often occurs when a borrower pays down a balance faster than scheduled and requests PMI to be removed based on the value used at closing.
3. Borrower requested (new value) – Occurs when a borrower requests PMI removal based on a new appraised value, and the loan has been open for at least two years.

Here are additional information about requirements that may or may not be required when a Homeowner is removing PMI on Conventional Loans.

The Homeowner should always consult their Servicer before taking any action, including ordering an appraisal. In most cases, the Servicer will need to order the appraisal themselves or they could have additional overlays/restrictions for removing PMI on Conventional Loans.

FHA cuts mortgage insurance premiums again

FHA cuts mortgage insurance premiums again: When the FHA announced late last year that its flagship fund, the Mutual Mortgage Insurance Fund, grew for the fourth straight year, it led to many question whether we would see a cut to its mortgage insurance premiums again. Now we have an answer. Click the headline for the full details on the FHA reducing mortgage insurance premiums.

Here is the historical rate of monthly and upfront mortgage insurance since 2008:

Date of Change	Monthly MI	Upfront MIP
Before January 2008	.50%	1.50%
October 2008	.55%	1.75%
April 2010	.55%	2.25%
October 2010	.90%	1.00%
April 2011	1.15%	1.00%
April 2012	1.25%	1.75%
April 2013	1.35%	1.75%
January 2015	.85%	1.75%
January 2017	.60%	1.75%

I thought I’d share some good news to kick the week (and year for that matter) off on a good note!  Please let me know if you need some help locking your first FHA loan of the year with us.   I’d be happy to do so.

An FHA streamline refinance is one of the best programs available to homeowners today.

If you currently have an FHA loan, you have the ability to do a reduced cost, reduced paperwork refinance by meeting the minimum benefit of reducing your effective interest rate by .50%.

Since January 2015, this meant that you had to reduce your actual interest rate by .50%.  Now that FHA mortgage insurance premiums have been reduced by .25%, you can now realize an “effective” rate reduction by through a reduction in mortgage insurance AND interest rate.

https://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2017/HUDNo_17-003