For many FHA loans that were originated or taken out prior to May 31st 2009 you will now be able to take advantage of FHA’s Streamline Refinance option at incredibly reduced upfront and monthly PMI rates.

Prior to this release a FHA streamline applicants would have had an upfront factor of 1.000% of their loan amount rolled in for their upfront mortgage insurance, and a monthly or annual factor of 1.15%. For many previous FHA applicants this basically made it cost prohibitive to take advantage of today’s low rates because their old monthly or annual factor was only .50% or .55% and using the guidelines for PMI prior to this announcement basically ate up all their proposed savings.

The new guidelines just announced will have the UFMIP which use to be 1.000% be reduced to only 0.01%, and no that’s not a typo. The new annual / monthly MI rate will be reduced from 1.15% to 0.55%.

Here’s a quick example of someone refinancing a $200,000 FHA loan under the old and new program.

Old UFMIP = $200,000 x 1.00% = $2,000 that gets rolled into your loan.
NEW UFMIP = $200,000 x 0.01% = $20 that gets rolled into your loan.

Old Monthly MI = $200,000 x 1.15% = $2,300 / 12 months = $191.66 PMI pr/mo
NEW Monthly MI = $200,000 x 0.55% = $1,100 / 12 months = $ 91.67 PMI pr/mo

This new program will go into effect June 11th 2012.

Bottom line is if you have a FHA loan that was taken out prior to May 31st 2009 and haven’t refinanced yet, there may never be a better time to take advantage of the current market and save a LOT of money by completing a FHA Streamline Refinance now!

Please contact me directly to discuss your own individual scenario.

Daniel Litvin
President of Advantage Lending Corp
248-608-9120 x230

• HARP loans will have better interest rates than before effective immediately.
• HARP loans will waive the 48 month seasoning for Bankruptcy & foreclosure, so you can apply NOW!
• Increased amount of appraisal waivers. You may not even need an appraisal.
• Original loan must have been completed prior to May 31, 2009.

There will never be a better time to refinance your upside down home and take advantage of today’s incredible interest rates. SAVE MONEY NOW! Contact me directly, Daniel Litvin President of Advantage Lending Corp at 248-608-9120.

This increase in cost will help to continue to fund HUD and FHA loans which are crucial for first time home buyers and borrowers with less than perfect credit.

First off, as previously mentioned, there is no down payment requirement, zip, zero, nada down. Besides a VA loan, this is the only other mortgage out there that offers this huge benefit. Next, most if not all your closing costs can be paid for by the seller of the home you are buying up to a full 6% of the sales price of the home. So basically if you’re buying a $100,000 dollar home, you can get up to $6,000 from the seller to pay for your closing costs, prepaid expenses, tax pro-rations, days of interest, and even your first years home owners insurance policy. Getting this 6% seller paid credit is more common than you may think. It’s my personal experience that over 80% of all purchase transactions get a seller credit to help the new buyer cover their closing costs.

How much Private Mortgage Insurance (PMI) will you pay per month? NONE! There is no monthly mortgage insurance policy that you pay for thus delivering you the lowest monthly payment when comparing other loans that do have monthly PMI.

So you’re probably thinking you have to have perfect credit to get this type of home loan, right? WRONG! Although the RD loan does offer better interest rates for borrowers with credit scores over 620, you can get this loan with a true zero score. Now if you have terrible credit, haven’t paid anyone on time lately, and your landlord doesn’t like your explanation for why you don’t have their rent this month, you’re probably not going to get approved. But if you’ve had a bankruptcy, foreclosure, charge offs, collections and you’ve worked at improving your credit and can show that for the past 12 months you’ve turned over a new leaf, then your credit score isn’t looked upon as much as your payment history and you probably stand a good chance of getting approved.

This loan also has an income limit depending on the number of people that will be living in the home and the specific county you are going to be living in. This restriction is in place to keep people who should be able to scrape together a down payment from using this program. For the most part this program is for low to moderate income earners. For example, a 1-4 person household in Livingston county is limited to earning a total household income of no more than $92,600 per year, a 5-8 person household in Oakland county is limited to earning no more than a total household income of no more than $107,800 per year.

Alright, alright already! Last thing…this is the Rural Development loan which basically means it has some geographic restrictions. Basically this means that you’re not going to get this loan in the Royal Oak, Macomb Township, or City of Detroit, they are not RURAL. But, Milford, Washington Twp, and Brownstown Twp are eligible. For the most part 85% of upper and lower Michigan are eligible and you shouldn’t just assume that the area your interested in isn’t. Click here to see if a property or area you’re looking at is eligible for this program.

For more information about this program and to find out if it may fit your mortgage needs, contact Daniel Litvin at Advantage Lending Corp by phone at 248-608-9120 x230.

The FHA 203K is a loan that can be used for buying a home and completing necessary or desired repairs, or for financing your next home improvement project. This is a FHA home loan. Difference is that it’s FHA’s loan for construction. Although you can’t use this loan to build a brand new home, you can do repairs or renovations that range from as little as $5,000 all the way to your counties maximum loan limit for a FHA loan.

Some examples of the types of repairs you can do with this loan are:

• New roof
• New appliances
• New flooring
• New windows
• Mold remediation
• New kitchen
• Room additions
• Add an entire second floor
• New paint

The list can go on and on. Basically as long as the home is going to be worth close to what your new loan is you can do it! (luxury items excluded, i.e. new pool, hot tub, tennis courts etc)

Generally the work must be completed by a licensed general contractor, but depending on your own personal experience, and available time, you may be able to do some or all the work yourself with a “self help” agreement between you and the lender.

There are two types of this loan. The 203K Streamline allows for up to $35,000 in repairs, has two draws, and all work must be completed in 90 days. The full version of this loan is only limited by your counties maximum loan limit for a FHA loan, has up to 6 draws, and gives you 6 months to have all work completed.

Let’s look at a real world example. If you wanted to buy a home with FHA financing for $100,000, your down payment would be $3,500 dollars. And if your total closing costs including funds needed to start up your escrow account and insurance totaled $6,100 but you had a seller credit of 6% or $6,000 dollars in this case you would only need to pay the $100 dollars left that the seller credit didn’t cover. In all under this example, your total out of pocket would only be $3,600 dollars.

A special thanks to James Baldiga over at Great Day Interactive for all of his hard work and expertise!

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