What is an FHA Mortgage Loan?

FHA Mortgage Loans are quickly becoming one of the most popular loan programs nationwide.  FHA mortgages are often called government home loans because they are insured by HUD against default so they are a stable option with low rates and typically a fixed interest rate that includes principal reduction as part of the payment each month.

FHA has been around for decades, and there are many innovative programs to help different segments of the population to realize the dream of home ownership.  For example, the teacher-next-door program allows teachers to buy a home in particular neighborhoods at 50% of the sales price with an FHA mortgage loan, and FHA will pay the other 50%.  The FHA Kiddie Condo program allows a parent or other blood-relative to co-sign for their child on the purchase of a home or condo. We also offer the FHA rehab loan. Contact us for more information on this great FHA mortgage loan. These are just a few examples of the many programs that FHA offers.

If you currently have an FHA loan, the FHA Streamline Refinance program is a fast and easy way to lower your payment or refinance out of your adjustable rate FHA mortgage loan.  No appraisal, no credit check, and no income or asset documentation make this program hassle-free.

What is an FHA Pre-Qualification?

If you would like to buy a home, an essential step before you start looking is to get pre-qualified.  This means applying with a lender and going through a credit check as well as some documentation to verify income and down payment source.

Once this has been done, we will issue you a pre-approval letter which you will submit with your offers on a home to let the seller know you have the financing lined up.  Our FHA mortgage loan experts are standing by to help you get pre-approved or to answer your questions now!


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Today’s FHA Mortgage Rates.

December 15, 2011

*Please note that FHA Rates are subject to change, sometimes several times per day.*

*We now have credit score tier specific FHA Mortgage Rate!*

*All FHA Rates posted are based on 30 day locks. *

*Please note that the FHA Rates posted are subject to adjustments for the following criteria*

1) Loans amounts under $100,000.00.

2) State specific adjustments.


FHA 30 year fixed Credit Score 620-639 Rate APR
with 1.231 points 3.750% 3.854%
with .669 point 3.875% 3.970%
with 0 points 4.000% 4.096%
FHA 30 year fixed Credit Score 640-659 Rate APR
with 1.054 points 3.75% 3.844%
with .504 points 3.875% 3.970%
with a CREDIT of .323
4.00% 4.096%
FHA 30 year fixed Credit Score 660-679 Rate APR
with .654 points 3.750% 3.844%
with .104 point 3.875% 3.970%
with a credit of .723 point 4.000% 4.096%
FHA 30 year fixed Credit Score 680-699 Rate APR
with .404 points 3.750% 3.844%
with a credit of .146 point 3.875% 3.970%
with a credit of .973 points 4.000% 4.096%
FHA 30 year fixed Credit Score       700-740
Rate APR
with .154 points 3.750% 3.844%
with a credit of .396 points
3.875% 3.970%
with a credit of 1.223 points 4.000% 4.096%




FHA 15 year fixed Credit Score 620-639 Rate APR
with 1.913 points 3.250% 3.414%
with 1.625 point 3.375% 3.540%
with 0 points 3.750% 3.844%
FHA 15 year fixed Credit Score 640-659 Rate APR
with 1.928 points 3.25% 3.414%
with 1.562 points 3.375%
with a credit of .560 points
3.50% 3.666%
FHA 15 year fixed Credit Score 660-679 Rate APR
with 1.303 points 3.250% 3.414%
with .937point 3.375% 3.540%
with a credit of .814 points 3.500% 3.666%
FHA 15 year fixed Credit Score 680-699 Rate APR
with 1.303 points
3.250% 3.414%
with .937 points 3.375% 3.540%
with a credit of 1.064 points
3.500% 3.666%
FHA 15 year fixed Credit Score      700-740
Rate APR
with 1.178 points 3.250% 3.414%
with .812 points 3.375% 3.540%
with a credit of 1.195 point
3.500% 3.



Compare Today’s National FHA Rates with Today’s USDA Rates and Today’s VA Rates.

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All rates are effective December 15, 2011 and are subject to change without notice. Information provided is solely for use by licensed real estate agents, builders and consumer use but not for distribution. Rates and APR are accurate as of date shown above and subject to change without notice. *APR and rates are based on $200,000 loan amount and 30 day rate locks.

FHA Buy and Bail Exceptions


HUD-4155.1 REV-5, paragraph 1-2


Principal Residences

Question 50: If my principal residence is currently covered by an FHA-insured mortgage, can I purchase another principal residence with an FHA-insured mortgage?

Answer: Only under the following situations described below:

a) Relocation – Relocating to another area not within a reasonable commuting distance from the current principal residence. There is no need to reduce the principal balance. Reference to HUD Handbook 4155.1, 4.B.2.d and Mortgagee Letter 2008-25.

b) Increase in Family Size AND the outstanding mortgage balance on the present property is paid down to 75 percent or less LTV exclusive of any financed MIP.

1 – A current residential appraisal must be used to determine LTV compliance.
2 – The borrower must provide satisfactory evidence of the increase in dependents and how the property no longer meet the family needs. See
Handbook 4155.1, 4.B.2.d.

c) Vacating a jointly owned property; Please Note: Situation cited in HUD Handbook 4155.1, 4.B.2.d. is only meant to be one example of an acceptable situation.

d) Non-occupying co-borrower; On a case-by-case basis, a relative could be a non-occupying co-borrower on more than one FHA-insured property. For example, Mom and Dad are non-occupying co-borrowers on both son and daughter’s FHA-insured mortgages. Reference Handbook 4155.1, 4.B.2.d.

Note: To prevent circumvention of the restrictions on FHA-insured mortgages to investors, FHA generally will not insure more than one mortgage for any borrower (transactions in which an existing FHA mortgage is paid off and another FHA mortgage is acquired are acceptable.

FHA will not insure a mortgage if FHA concludes that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining investment properties, even if the property to be encumbered will be the only one owned using FHA mortgage insurance.

Contact us now by filling out the form below to find out if you qualify for one of these exceptions.

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Bank Of America – Making News For All Of The Wrong Reasons.


The latest news from Bank Of America is they are no longer going to offer FHA cash out refinances.


Has anyone else noticed that Bank Of America seems to be making news for all of the wrong reasons? How about the the news that hasn’t been reported, like the fact that Bank Of America is no longer going to offer the popular FHA cash out refinance?

Another dirty little secret about Bank Of America is their policy to refuse to process mortgage payoff requests for refinances. If you have an FHA Mortgage with Bank Of America and you decide to get an FHA cash out refinance or an FHA Streamline refinance with another lender, Bank Of America will not process your payoff request (which slows down your refi!) for your preferred lender until they speak to you and have a chance to “sell” you on staying with them!

It’s bad enough that we, as tax payers had to bail them out but now that Bank Of America has been saved from failing all the news surrounding them looks like a giant middle finger to the collective public.


Let’s take a look at some of the most recent headlines that Bank Of America has been generating.


1) Forbes -Bank of America Has Reportedly Considered 40,000 Job Cuts

Bank of America (BAC) officials have reportedly considered as many as 40,000 job cuts.

The Wall Street Journal is reporting that the cuts, which would come mainly from its consumer operations, would be part of its “Project New BAC” overhaul.

The Journal said the cuts would be in addition to the 6,500 the firm has already made this year.

Click this link Forbes to read the rest of this story.



2) The NY  Times – Bank Of America to start charging $5.00 per month for using their debit cards.

When Bank of America told its customers recently that it would start charging them $5 a month to use debit cards, it argued that it was forced to make that change because of regulations that altered the economics of the cards.

Click this link The NY  Times to read the rest of this story.


3) National Mortgage News – Bank Of America decides to exit VA cash-out refinance mortgages.

This past week National Mortgage News broke several updates on the bank, including its decision to quit offering  FHA cash out refis and VA cash-out refis, the collapse of talks with Fortress over its correspondent unit and its decision to exit six states. 

Click this link National Mortgage News to read the rest of this story.



These headlines would lead one to believe that Bank Of America surely must be on the brink of going under but not according to the next 2.


From The Guardian

-Profit on Wall Street, recession on Main Street



Taxis pass the Bank of America

Bank of America is typical of the trend of increasing profits while laying off thousands of staff. Photograph: Shannon Stapleton/Reuters
In the past few weeks alone, Bank of America, Goldman Sachs, Cisco Systems and Borders have all announced massive layoffs. Borders is closing its retail stores, auctioning off its holdings and letting go 10,000 employees as, due to online competition, the company is no longer profitable and filed for bankruptcy earlier this year. In contrast, Bank of America, Goldman Sachs and Cisco Systems have all posted profits in the last few quarters – in some cases, record highs. Alhough according to the latest data, 9.1% of Americans are unemployed, major US corporations are slashing jobs not out of necessity but out of greed. The revived focus in Washington on creating jobs may be pointless if corporate America no longer needs workers.


Bank of America Profit Drops 37%

This headline is misleading to say the least.


With overall earnings of $2 billion, or 17 cents a share, the bank still missed analysts’ estimates of 27 cents a share. Bank of America earned $3.2 billion, or 28 cents a share, in the same period a year earlier.

Total revenue dropped, too, to $27 billion from $32 billion, a decline partly attributable to the weak economic recovery. As consumers cling to their cash amid uncertain times, mortgage lending has stalled at Bank of America and other giant lenders. The bank, facing new government regulations, also missed out on millions of dollars in overdraft fees and other charges once levied on consumers.


So Bank Of America’s profits drops 37% yet they still made $2,000,000.00 (yes that’s 2 BILLION dollars) and claim they need to charge you $5.00 per month to spend your money, lay off 40,000.00+ of  our friends, family and neighbors on top of eliminating FHA cash out refinances.


At what point do we, as Americans and consumers, stand up to these greedy corporate machines?


If you bank with Bank Of America, take your business to a local community bank or credit union.

If you have an FHA Mortgage with Bank Of America, refinance it with another lender like ENG Lending.

If you own shares of Bank Of America,  sell them and invest elsewhere.

If you plan on buying a home, do not get your mortgage from Bank Of America.

If you have a credit card with Bank Of America, transfer your balance to another card or pay it off.


All that is necessary for evil to triumph is for good men to do nothing –Edmund Burke


Do your part, take action NOW! Fill out the form below to contact us and refinance your Bank Of America FHA Mortgage.

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Why An FHA Loan Still Makes More Sense Than A Conventional Loan.

Here is a question a lot of first time home buyers and even seasoned pros ask.

Is an FHA Loan better?

Well let’s take a look at the numbers to see if we can figure this out together.

It all depends on your personal financial situation and your short/long term goals.

It generally does not make sense to sink a bunch of money into a depreciating asset unless you have a very long term goal in mind so

maybe that 20% down conventional mortgage isn’t the best option. This is just my humble opinion.

The other factor to consider is how much money you have left in reserves for emergencies after your down payment is subtracted.



Here are some numbers to consider.

Let’s say you’re looking at a home for $200,000 and you have a 720 credit score.

Here is how your pricing (rate) would look today.

On a conventional loan with 20% (or $40,000.00) down you would be looking at 5% 30 year fixed rate which would give you a monthly payment of $858.91 plus taxes and insurance.

On an FHA Loan with just 3.5% (or $7,000.00) down you would be looking at 4.75% 30 year fixed rate which would give you a monthly payment of $1,161.60 (including the monthly mortgage insurance) plus taxes and insurance.

That’s a difference of $302.69 per month for the first 5 years at which point the mortgage insurance drops off of the FHA Loan and the payment difference would go down to $157.94 per month.

Here are the numbers you really want to look at.

For the first 5 years the difference between the payments would look like this $302.69 X 60 months (5 years)= $18,161.40. Now take this number and subtract it from the $40,000 down payment and you get $21,838.60.

Now divide $21,838.40 by the difference in payment of $157.94 and you get 138.27 months or 11.52 years.

What does all of this mean?

It means that you would have to spend 16.52 years in the home and loan to recoup the $40,000 down payment when comparing the difference in the monthly payment.

Here is how it breaks down again.

For the first 5 years in the FHA Loan you would pay $18,161.40 MORE than the conventional loan.

For the next 11.5 years you’ll pay $21,838.60 MORE than the conventional for a total of $40,000.00.

In other words, you would be paying $40,000 upfront to save $40,000 in monthly payments for the next 16.5 years. How much money do you think that $40,000 could earn you in 16.5 years if it wasn’t tied up in your home?

It certainly looks like an FHA Loan is the better option, don’t you think?

Contact us for a free quote.

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