These refi’s sometimes lower the premiums charged. Let see what happens in the future.
By Jon Prior August 3, 2012 • 10:21am
Borrower applications to refinance Federal Housing Administration mortgages nearly tripled in June in order to take advantage of grandfathered insurance premiums.
Banks received 102,640 refinance applications on FHA mortgages in June, up from just more than 34,000 in May, according to an agency report released this week.
On June 11, the FHA allowed borrowers with loans endorsed before June 1, 2009, to take advantage of a streamlined program and pay reduced rates for upfront and annual insurance premiums. Income, employment and credit scores are not verified, and an appraisal is not needed. Principal and interest can be cut under the program, or the borrower can refi into a shorter-term loan to recover equity quicker.
Bank of America Merrill Lynch ($7.82 0.1834%) analysts expected prepayment speeds on the Ginnie Mae bonds these mortgages back to pick up in June, but the activity surprised even them.
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Proprietary OC Housing News home purchase analysis
$510,000 …….. Asking Price
$510,000 ………. Purchase Price
7/27/2012 ………. Purchase Date
$0 ………. Gross Gain (Loss)
($40,800) ………… Commissions and Costs at 8%
($40,800) ………. Net Gain (Loss)
0.0% ………. Gross Percent Change
-8.0% ………. Net Percent Change
0.0% ………… Annual Appreciation
Cost of Home Ownership
$510,000 …….. Asking Price
$17,850 ………… 3.5% Down FHA Financing
3.70% …………. Mortgage Interest Rate
30 ……………… Number of Years
$492,150 …….. Mortgage
$129,578 ………. Income Requirement
$2,265 ………… Monthly Mortgage Payment
$442 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$128 ………… Homeowners Insurance at 0.3%
$513 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
$3,347 ………. Monthly Cash Outlays
($343) ………. Tax Savings
($748) ………. Equity Hidden in Payment
$22 ………….. Lost Income to Down Payment
$148 ………….. Maintenance and Replacement Reserves
$2,426 ………. Monthly Cost of Ownership
Cash Acquisition Demands
$6,600 ………… Furnishing and Move In at 1% + $1,500
$6,600 ………… Closing Costs at 1% + $1,500
$4,922 ………… Interest Points
$17,850 ………… Down Payment
$35,972 ………. Total Cash Costs
$37,100 ………. Emergency Cash Reserves
$73,072 ………. Total Savings Needed
The property above is available for sale on the MLS.Contact us for a comparative market analysis, a cost of ownership analysis, or information on how you can make an offer today!
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