Living in Charlotte County Florida

Find the perfect home in sunny southwest, Florida

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Mortgage insurance premiums to increase for FHA loans

Beginning April 18, 2011, the  Federal Housing Administration (FHA) mortgage insurance premium will be increased on all 30 year and 15 year loans. The amount of the increase is a quarter of a percentage point (.25).  This will in turn be an average cost to new borrowers of about $30 per month. 

FHA says the increase is necessary to maintain the solvency of the Mutual Mortgage Insurance Fund (MMIF).  It is estimated that this increase will contribute around $3 billion annually to the MMIF.  The increase may have borrowers looking to obtain mortgages in the private sector.  FHA loans will cost a borrower almost twice as much for mortgage insurance on a 30 year loan as compared to a non-FHA mortgage.

If you are looking to buy a home with an FHA mortgage, now is the time to apply before the increase happens.  There are plenty of great deals on homes in Southwest Florida.  Get your piece of paradise while the picking is still good. 

For information and questions on FHA loans, go to their web site at:

Tammy Hayes, Sandals Realty, Punta Gorda, FL

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Lower costs for borrowers

There is a new Federal Reserve rule called “Loan Originator Compensation amendment to Regulation Z” which is part of the Truth in Lending Act.  It will take effect April 1, 2011.  This rule sets a fixed commission for mortgage brokers tied to the loan terms. 

This rule is designed to protect consumers in the mortgage market from unfair or abusive lending practices.  It prohibits payments to loan originators based on the terms or conditions of a transaction.  Mortgage brokers will now get paid the same amount to process an easy loan or a complex loan.  It also prohibits steering a consumer to a lender offering less favorable terms in order to increase the loan originator’s compensation.

This rule applies to all loan originators employed by mortgage brokers or by a creditor (depository institutions and mortgage bankers). Many mortgage brokers are unhappy about this change and some will even be put out of business.  The good news is the borrower will end up paying less.  Consumers that get a mortgage through a broker will be offered the lowest possible rate and fees for which they qualify. 

To see extensive details of Regulation Z go to the web site:

Tammy Hayes, Sandals Realty, Punta Gorda, FL

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Higher down payments required on home purchases

Banks and mortgage lenders are now starting to require higher down payments if a borrower wants to buy a home.  It could be anywhere from 10% to 30% down.  Banks are trying to minimize the risk they are taking in case the prices of homes continue to decrease.  In addition, a higher down payment also discourages delinquencies.  During the boom many home buyers placed little or nothing down. 

Home buyers who cannot afford the higher down payments are looking for other types of loans such as FHA or VA.  FHA backed mortgages require 3.5% up front.  However, these type of mortgages require private mortgage insurance and often are offered at  higher interest rates.  This makes monthly payments higher. 

Loan guidelines for condominiums have also changed.  Interest rates on condos are higher as well as the down payment requirement.  Keep in mind that most condos have homeowner associations with additional fees.

If you are looking to purchase a home, check with a mortgage lender to see what options are available for your specific situation.  If you cannot afford a loan right now, they can tell you what you need to do to be able to purchase a home in the future. 

To compare Florida mortgage rates from different lenders go to

Tammy Hayes, Sandals Realty, Punta Gorda, FL