May 20th, 2008 Brent
In the one-on-one FHA training I give to the loan officers I have worked with, I always stress the importance of keeping all options on the table. Sometimes a conventional loan is possible but it does not make sense to the borrowers. Other times it is a great option that can be moved through underwriting very quickly (FHA underwriting is incredibly bogged down right now). There are sure signs that your borrower is in need of an FHA loan.
If your borrower has limited funds for down-payment on a purchase transaction, FHA should be considered. If the borrower cannot get gift funds, then FHA is a must. With the inclusion of Downpayment Assistance Programs (DPA’s), a borrower can have the required 3% down as well as money from the DPA to help cover all their closing cost. This provides a method for a true 100% financing loan.
If the borrower is borrowing 90-95% of the property value, you should check mortgage insurance rates to see which works out better long-term for the borrower. Remember, in calculating this, that you not only have to consider the monthly MI from FHA but also the financed MI at the time of transaction. On a $200k rate and term finance for even the highest FICO borrowers conventional MI on this loan range would be over $120 each month. Taking both the monthly MI and financed MI into consideration, your FHA total MI would be around $20/month less (assuming around 6.5% on rate. And while this might not seem like much, it will add up).
Finally, in thinking about mortgage insurance, you must remember the tightening of the market. Not all borrowers can get mortgage insurance. If you borrower gets decisioned as an EA-I or worse through DU (and the corresponding LP approvals), mortgage insurance cost may make the loan not affordable to the borrower. On a similar example above, MI comes in at $200/month and the findings state that a 650 FICO may be out of their underwriting range. Again, with FHA, the cost is just over $100/month.
There are many more reasons why a borrower would be better fit for FHA than conventional. I have taken the time list three very common reasons and the thought behind them. Keeping up on FHA training will help you recognize these scenarios.
To get the best FHA training for the cost, get The ABC’s of FHA Lending.
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April 27th, 2008 Brent
With mortgage lending guidelines tightening, many brokers and loan officers are finding it harder to find a bank that will finance their clients. Mortgage Insurance has become nearly unaffordable for high loan-to-value loans as well as nearly unattainable based on the client’s FICO score. FHA loans present an opportunity to obtain financing for your clients and keep their MI low. Having some FHA training and being informed will help you understand the different products you now can offer, which will lead to more clients and higher profits.
FHA provides a variety of products. The main product is the standard 203(b) loan. This product is geared towards borrowers who can afford housing but might not have a great credit history. A good, thorough FHA training will help you understand how these borrowers can still fit into the loan and how to have your client “tell the story” of their credit history. Likewise, the 203(k) loan is for FHA eligible borrowers who have found a property that needs a little renovation. With the recent meltdown of the credit markets, the Federal Housing Authority now has the FHA Secure program which is geared towards borrowers with issues after their adjustable rate mortgages recast. Have the ability to lend for FHA and having training on the products will give you a variety of extra products you can offer your clients.
For affordable FHA training for your mortgage business, check out the ABC’s Of FHA Lending.
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April 23rd, 2008 Brent
FHA Training can be the difference between an office struggling to get files approved and making a lot of money by submitting clean files that get approved quickly through underwriting. While FHA is not the overall answer for every broker or loan officer, it is a product that can be used to fit certain borrowers into a loan with a great rate and very good pay for the origination. There are many benefits to having a good FHA training for your office.
If your FHA training is effective, your loan officers, or yourself, can quickly do an evaluation to know whether FHA is a better choice for your client than a conventional mortgage. Although borrowers typically only see the rate difference, the difference in MI (if it is needed on the conventional mortgage) may make the difference in whether the payment makes sense for the borrower. Not everyone is a good candidate for FHA, and going through an FHA training course and material will help in knowing which is better for the client.
This is a great FHA training course for little money. CLICK HERE to get it now!
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April 23rd, 2008 Brent
FHA presents one of the biggest opportunities for loan officers, mortgage brokers, and borrowers alike. With looser underwriting standards than conventional mortgages, more affordable monthly mortgage insurance, and low interest rates, FHA is quickly becoming a product that loan officers and brokers need in their offerings. Not only does it mean more business, it also has very lucrative pricing to go with it. Having FHA loan officer training for your office will not only improve the quality of file submissions to underwriting but will improve the confidence the clients have in your business.
The first thing that should be taught in the FHA loan officer training in your office is how to quickly spot a file that will not survive underwriting. Typically, one or more mortgage lates (1×30, sometimes 2×30 depending on the lender) will automatically disqualify the file. If the borrower is delinquent on any federally insured debt, a student loan as an example, they must be current if they intend to get the loan. FHA training for your loan officers will help them spot these issues and others very quickly before wasting time and energy on the file.
To get great FHA training for you and your office, CLICK HERE.
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