The message below about refinancing homes that are “upside down” or “underwater” and a new program that MAY end up helping a few of the responsible homeowners who have been limited in their ability to refinance due to declining market value of their homes.

With all the recent news about H.R. 5981, I thought I’d share that we now have through the entire month of September before the change will take place with FHA mortgage insurance premium fees. It will effect new case numbers on or after October 4, 2010.

FHA intends on lowering upfront mortgage insurance premiums, but raising the monthly mortgage insurance premium. This will make an impact for those who are looking to purchase a home but are down payment sensitive.

PENCIL PUSHING: Do the math for yourself: 6% is a pretty normal rate in a normal economy. Just how good are rates now? On a $200,000 loan, the difference in 4.25% and 6% is $213 per month! The 6% rate produces a payment of $1,193 vs. a $980 payment at 4.25%, a difference of 17.85%!

If you’re thinking about buying your first home, these five steps can help ensure you get the right house and the affordable financing that helps make home ownership a long-term success:

Luckily, the experts at MN Home Loan Partners can help you navigate through the maze! For the sake of this blog post, we will focus mainly on assets and how those play into your mortgage prequalification.

First of all, not all lenders are created equal. The 203k loan program does have very specific requirements to make the process go smoothly. Some lenders have perfected this process, most of them have not. I am proud to say that we have Elizabeth Vaughan here at Cornerstone Mortgage. Elizabeth is the master of 203k loans!

On an FHA loan, mortgage insurance is required to be paid in the form of both upfront mortgage insurance premium and an annual mortgage insurance premium. Currently, these amount as set at 1.75% upfront and .55% annually for minimum down 30 year fixed rate mortgages. The change, that is scheduled to begin April 4, 2010, increases the upfront premium to 2.25% and leaves the annual premium at .55% for 30 year fixed rate mortgages.

There are special loan options for first time home buyers when looking at foreclosed or short-sale properties that need a little, or a lot of work. Homes that are in need of repairs don’t need to be overlooked when you’re shopping for your first home – even if you’re not a ‘handyman’. There are mortgage loan options available that still allow you to get into your first home with a minimal down payment AND allow you to fix some things that may need repair.