January 2014

Should Chicago Area Home Buyers get FHA Loans?

Mortgages with low down payments, the most popular type of mortgage, keeps getting pricier and less appealing as buyers question the worth of obtaining an FHA loan. On loans backed by the Federal Housing Administration, the mortgage insurance premium has nearly tripled since 2008. Recently FHA changed the rules so that now borrowers must pay for mortgage insurance for the entire life of the loan. “FHA loans really used to be a first option for homebuyers with a low down payment,” says Scott Schange, a branch manager for Broadview Mortgage Katella in Orange County California, “Now I see people doing them because they have to and not because it’s their first option.” The Federal Housing Association allows buyers to obtain a mortgage with a down payment that can be as low as 3.5 %. The underwriting requirements to qualify for FHA loans are general less strict than that of a…

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Simplified Mortgage Forms on the Horizon for Chicago Area Home Buyers

Mortgage borrowers will be receiving more condensed and streamlined disclosures thoroughly explaining the terms of their loans. These new forms have been finalized by the Consumer Financial Protection Bureau (CFPB). The two forms formerly known as the “Know Before You Owe” forms, will replace four separate disclosures that are given to borrowers prior to closing their loans. The intention of these new forms are to make it easier for the borrower to understand the loan terms and reassure them that they are getting the same terms they negotiated without any hidden costs. “Taking out a mortgage is one of the biggest financial decisions a consumer will ever make”, said Richard Cordray, CFPB director. “Our new ‘Know Before You Owe’ mortgage forms improve consumer understanding , aid comparison shopping, and help prevent closing table surprises for consumers. Today’s rule is an important step toward the consumer having a greater control over…

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