Bradenton Real Estate

September 19, 2011

Home Mortgage Updates – Pending Changes

OK – it’s mid-September – where’s the cooler weather?

Well, if the weather is not cooling off, there are 2 upcoming changes that may have a “chilling” effect on mortgage lending.   Effective October 1, 2011:

1) Unless Congress steps in to take action, the current FHA maximum loan amounts for Manatee & Sarasota Counties will drop from their current level of $442,500, to $285,200 (for a 1-unit dwelling – single-family home, condominium, etc .) If you’re reading this and don’t like what you’re reading, please contact your Congressional representatives (House & Senate) to voice your concern.

2) The USDA will change their fee structure from the current one-time fee of 3.5% (which is usually included/financed in the mortgage) to a one-time fee of 2.0% (also to be financed) plus an annual fee of .3%, which will be added to the monthly payment.

 The net effect in terms of cost to borrowers should be as follows, based on a $100,000 mortgage:

Current – 3.5% upfront fee = $3500
– based on today’s current interest rates of 4.25%
— additional P&I cost is approximately $17.22 per month
New – 2.0% upfront fee = $2000
— based on today’s current interest rates of 4.25%
— additional P&I cost is approximately $9.84 per month
PLUS – .3% annual fee = $300/yr or $25/month
Total monthly cost = $34.84/month – more than double the current amount

Now the BIG question will be how much that will impact borrowers by lessening what they can qualify for!

Thank you for this Guest Post by:

Mike Koebel
Senior Mortgage Consultant

Home Lending Source
Reverse Mortgage Specialist
Direct: 941/792-2125


new mortgage disclosure form

Another change in near future is thenew ‘Mortgage Disclosure,’ combining the ‘Good Faith Estimate’ and the ‘Truth in Lending Statement.

Today is the last day to give the Consumer Financial Protection Bureau your feedback on the new ‘Mortgage Disclosure form that is being drafted.

The intent is to make it easier for the consumer to understand the basic facts for a mortgage loan that they are applying for before they commit to it.  If you haven’t weighed in with your feedback … do it today

Vote on your choice here…


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