Madison Mortgage Blog: Dennis Hardy

Preparing for a Mortgage Refinance in Wisconsin, Illinois, Minnesota and Florida

With the record low mortgage rates making headlines on a regular basis, now is a good time to consider refinancing a home loan.  Here are a few guidelines to consider when preparing for a refinance.

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Income Limits Published Effective June 2, 2010

The USDA has announced the income limits for the Guaranteed Rural Housing (GRH) Program have changed effective June 2, 2010. As of 2009 income limits are currently based on a two tier income structuring consisting of a 1 – 4 member household and a 5 – 8 member household which replaced the 1 – 8 person structure in 2008.

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New USDA Rural Housing guidelines and funding fee increases are coming , but we see no reason to stop processing and approving these loans. The funding fee will rise to 3.5% of the mortgage amount to strengthen the insurance fund and reduce the number of times the USDA has to lobby Congress for more money. This fee can still be rolled into the mortgage, making Rural Development the most economically attractive way to purchase a home.

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Jumbo Loans – Restrictive, but available

A lot of questions have been posed about all types of mortgages in this economy.  One mortgage that seems to get more scrutiny than others is the jumbo loan.  These unique loans are still around, but the approval process has changed considerably.

A “ jumbo” mortgage is any loan larger than the Fannie Mae or Freddie Mac conforming limit (for most areas of the country that limit is $417,000)  , which means these agencies will not purchase these loans. Now that there is no longer a market to sell these mortgages to, the banks that originate them must assume all of the risk involved.

Large down payment requirements, documenting all income, increased cash reserve requirements and, in most cases, the elimination of long term fixed rates, are all ways of reducing the bank’s risk in a volatile economy.

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Extra! Extra! USDA Rural Housing news from D.C.

I’ve written that “The race is on!” and “Don’t give up!” concerning USDA Rural Housing funds for mortgages.  There is news from Washington today that help may be coming. The House of Representatives has passed a proposal that would increase the funding fee (3.5%?) to help protect the insurance fund….AND…. more than double the amount of funds (30 Billion) available to lenders this year.  IF… the Senate can agree on this, commitments may begin to be issued soon.

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Update 5/28/2010 We Still Do USDA Guaranteed Rural Housing Loans!

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Good to the last dollar!

Rural Development funds were projected to run out before the end of April. Many large lenders across the country stopped processing these loans to avoid having the cash window shut in their face.  Those who continued to apply for the (100%, no monthly MI, low 30 year fixed rate and a 2% financed funding fee) RD  loan have been rewarded with the best possible loan in today’s mortgage market.

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