Exciting news for Potential FHA loan Borrowers From a Real Estate Agent Perspective

You may have heard recently in the media or even read it on a news, mortgage or real estate website.

HUD also known as the U.S. Department of Housing and Urban Development announced new lower premiums on the common fee of Mortgage Mortgage Insurance or to some often referred to as PMI.

Just a little rundown. If you take out a FHA Loan to secure the financing on your home, you have what’s referred to as MIP aka Mortgage Insurance Premium attached to your loan on a annual (it’s broken down monthly in your mortgage payments) basis and upfront fee.

Essentially, the upfront fee was 1.75% of your loan for loans issued on a 30 year note. This amount can be paid at closing by you, the borrower along with your other closing costs associated with your loan including your down-payment funds or it can be rolled into your loan (at lender discretion) instead. So to give you a rough estimate of that amount. Let’s say you are doing a loan for $100,000 and on that your down payment would be 3.5% or $3,500 on a FHA loan. With the MIP upfront fee of 1.75% (current rate prior to change effective January 26, 2015), that would leave you having to bring $1688.75 + 3500 for a total of $4,688.75 to closing and that’s before any other closing fees like appraisals, title work, home warranty, or escrow funds. And on your monthly loan payments say at a 4.75% Annual Percentage Rate, that tacks 1.35% or for the example given $108.56 on to your Principal & Interest would be $512.20, and that total doesn’t include your Taxes and Home Insurance which all comprises your mortgage payment. Those totals so far monthly would be $620.76 again not including your taxes and insurance that would be required as part of your monthly payments.

Confused much? I hope not this is just a rough estimate to show you the effect of the current 2013 MIP Upfront and MIP Annual fees on your mortgage payment each month and closing on your loan.


Now with the proposed announced change, that fee has now been changed to 0.85% on the annual MIP amounts. So for that same loan in the example above your Principal and Interest would be $512.20 but now your monthly MIP would be roughly $71. So under the proposed new changes your payment would $583.20 before taxes and insurance. That new $38 difference can mean a lot to FHA borrowers especially when you look at it over the life of the loan or on a 30 year basis. That would be essentially saving roughly $13,680 over 30 years in a fee that doesn’t apply towards the principal balance of your overall loan.

Dramatic Difference in Payments Right?

That now makes the FHA more affordable to first time home-buyers and those holding loans issued in the last 36 months. And it could result in reductions for those existing FHA borrowers serving to put money back in their pockets each month or they can take a hint and apply it to their principal each month and pay down their mortgages quicker.

Take a look at this past post I did as well regarding money and home purchases.

If you are interested in purchasing a home using the FHA low down-payment program of 3.5% down for St. Louis Real Estate email me at tamara@realestatestlouisnow.com or call me at 314.660.9709

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Information on how Real Estate Agent Representation Works for You!

Most often we hear that saying you need an Agent to represent you not matter if you are buying or selling. There’s a lot of truth to those words. You have to honestly ask yourself, can you decipher the language of a real estate contract, do you know if that contract is offering protections to the buyer or seller. What if you hit a stand still in negotiating or otherwise getting your mortgage, could you risk losing your Earnest Money?

Know that for a fact, that if you are presenting an offer a Buyer’s Agent works for the Buyer and the Listing Agent works for the Seller.  Having someone knowledgeable by your side can save you a lot of time and energy that can be better spent preparing for your new home. Get to know me, Tamara Liggins REALTOR®

Visit houselogic.com for more articles like this.


Part 1: Want to be a Home Owner, Money Getting in the Way? Read On!

Buying your home can be a daunting task. Whether you have purchased many or going at it for the first time. I am here to tell you first off if there is something you don’t know ask a Real Estate Agent. If there is something you want to know, don’t be afraid to ask or want clarification. This is an investment and most often the biggest decision we make in life. I got into Real Estate because I enjoyed helping people on any subject that I was knowledgeable on or guiding them to someone that could assist them with care.

The subject I really wanted to touch upon today is Down Payment Assistance. I’ve looked through and compiled a lot of information regarding assistance because I myself needed it as well. That lead me further into Real Estate and what better way to help others then to become a licensed REALTOR®

I noticed when talking to people, the main reason they avoid the subject of purchasing a home is the scare of a large down payment or becoming responsible for the care and upkeep of property.

There are programs out there whether they are Federal, State, Local or Municipal. I live in St. Louis, one of the places I looked into owning a home was Florissant, MO unknown to me, in conjunction with St. Louis County Government offers a program called 1st HOME not only does it offer a Loan Amount (at the time of writing) $3500, it’s zero interest when you qualify on the income limits. Click the link and find out more. There is some work involved on your end with a Participating Lender/Counseling Agencies, make sure you ASK questions and understand how rewarding and beneficial it can be to you. Also not your first home? How long has it been since you last owned a home? You just may still qualify. If you determined that Florissant is not for you, the program operates in other areas of St. Louis including St. Louis County, St. Charles County, Jefferson County, O’fallon, City of St. Charles and Wentzville.

That is just one program in itself. There are several more that I’m going to touch upon in this post.

The next program is the Neighborhood Stabilization Program (NSP), this program offers a lot based off certain qualifications and has homes that have already set and waiting on you. From How to Buy a NSP County Home. Due to certain restrictions I am unable to list all of their information here.

The last program in this post that I touch upon is the Hometown Heroes Homeownership Program, this is geared towards people that work as primary or secondary teachers, firefighters, EMT, LPN or RN nurses, military including active or veterans, police officer, and Retirees of either of these professions are even considered with certain requirements.

If you want to learn more information or have questions about how you can qualify while starting or continuing your home search, reach out to me at
my real estate site or email me at tliggins@kw.com

I will be updating this post in several parts until I get enough information in front of you that let’s you know there is help to realize your Homeownership Dreams in Missouri.

Your welcome to recommend this post to your friends, family and colleagues in helping them realize there is help out there for them too.