FHA claims the increase is necessary to bolster their capital reserves, but many question if this move is really needed.  So, what does this mean to the average Georgia FHA customer?  It means your payment is going to be higher if you don’t act fast.  Here is an example-  You are getting a $200,000 FHA loan.  The monthly mortgage insurance factor is currently .90, so $200,000 x’s .009 is $1,800 divided by 12 is $150 per month in MIP.  When the factor goes to 1.15, MIP goes to $192.  Forty-Two dollars more a month, $504 more a year!  Less than 6 months ago, it would have been $92 a month.  Gee, thanks HUD!

In many cases, $42 a month can mean the difference between you qualifying for a mortgage or not.  $42 can effect your qualifying ratios.  You will need to act fast to avoid the increase.  Call me now to find out how.

Atlanta FHA ♦ 203k Georgia ♦ Credit Repair

Flood insurance is also a big issue right now.  On March 28, 2010, congress let the National Flood Insurance Programs authority expire.  This has not happened since 2002 and some speculate that the lapse was because Congress was focusing on getting the health care bill passed.  When the NFIP’s authority expired, they now do not have the authority to issue new flood insurance policies or renew old ones.  If this is not corrected soon, it could cause problems when trying to obtain a Georgia home loan.  If the property you are trying to buy needs flood insurance and you cannot obtain it, you may not be able to close on your GA home loan.

What can we do?  If you are a Realtor®, NAR has set up a call to action form that you can send to your congressmen.  Follow this link to the form -  NAR Call to Action

If you are concerned potential home buyer, write or call your congressmen.  Let them know these issues are important to you.

As far as Georgia FHA loans, these limits will also remain unchanged for 2010.  FHA loan limits vary by county and whether the property is multi-unit or not.  For most of metro Atlanta, the single family FHA limit is $346,250.  As you go out to more rural areas, that limit drops to $271,050. conforming loan limits are usually updated only once a year, so we will see if there will be a change for 2011, about this time next year.

If you have a question about GA Mortgage limits, feel free to contact us for more information.

So what is a 203k loan and how does it solve my problem? With a 203k loan you can borrow between $5,000-$35,000 to use toward repairs on your new home. This amount is added to your loan amount. A 203k loan is a version of a FHA loan. Typically you would put down 3.5% and obtain an FHA loan. However, If the home you are buying is a HUD home, then you may only have to put $100 down.

With a 203k loan, you will go ahead and close on your loan then the work will begin. You would have to choose a licensed contractor upfront to complete all of the work for you. The contractor will be paid as the work is completed.

The GA 203k renovation loan allows you to choose the home you want with out having to worry about coming out of pocket for all of those necessary repairs.

Some common repairs are:

• Repair or replace gutters
• Electrical or plumbing issues
• Flooring
• Painting and sheet rock repair
• Roofing
• Energy conservation improvements
• Major landscaping
• Improvements for the accessibility of the handicapped

Credit Scores are made up of:

• Payment History  — 35%
• Balances Carried — 30%
• Credit History      — 15%
• Mix of Accounts  — 10%
• Inquiries        — 10%

The two biggest portions are payment history and balances carried.  So pay all of your bills on time from now on and remember, the most recent 6 months weighs the most.  Paying down balances is an easy, effective way to raise credit scores.   Typically you want your balance to be 25% of your high credit limit.
$10,000 available high credit limit = $2,500 or less balance on the card

This brings up another suggestion – If your high balance is $10,000 and you can’t pay your balance to $2,500, why not call your credit card company and ask them to raise your high credit limit.   A lot of times they will!!!

Other Factors to Consider

• Never close credit accounts.  Pay them to zero, but don’t close them.  If you have a long credit history with a company, closing an account can lower your score dramatically.

• Personal Inquiries don’t hurt your score.   Find out what is on your credit report by going to annualcreditreport.com.  It is free, but obtaining your scores will cost you money.  You can get one free report per year.

• If you are paying off a judgment or collection, consult with your loan officer first.  Sometimes paying off collections and judgments will lower your score.  This happens because the activity date will be updated to the current date.  If it was an old collection, it will now appear as if it just happened, thus lowering you score.

One last exciting tool Academy mortgage can use to help you is credit rescoring.  If you are close, meaning you have a 610 fico and you need a 620 or you have a 692 and need a 700, for example, we can run your credit through a simulator.    This will tell us ways in which we can help you bring up your score.  For example, if you pay your credit card down $150 more dollars or that late payment that showed up on your mortgage was an error, so we have it removed.   The process can take up to 2 weeks from start to finish, so call today to find out how we can help.