USDA loans are property specific meaning that even if you are looking in a rural type of area, the address has to be eligible for an USDA loan. The same is true in urban areas. Some of those addresses are USDA eligible.

     These loans were great for borrowers who live in outer areas as it required little or no out of pocket cash to purchase the home. And for borrowers who had good credit but no cash, this was a perfect type of loan for them.

     But we are hearing from different lenders that they are no longer accepting applications for these types of loans. If your loan has been locked as an USDA loan you should be fine but check to be sure. Otherwise, as lender shut down these loans, you will need to find another loan product.

     Please don’t assume that USDA will come back. Banks that did hold on to these loans previously when money run out are now indicating that they won’t do so again. Most likely this is due to what they are hearing from DC as well.

     Be pro-active. Start today! Call your loan originator professional to get your loan locked. Or explore other type of loan programs that will suit your needs, such as FHA loans.  

      And as always, I will report daily on twitter @mmtgsolutions on the mortgage interest rates and what to expect for the day. If one of these reports moves the market in a significant manner, I’ll write about it here.

     Please remember, I welcome your comments and questions to this and my other posts.

To an  inspiring week,

Betsy Moore

206-331-2749

      Producer Price Index was up just slightly at 0.2% over the expectation of remaining flat for the month. Bond market likes this as this is lower than the somewhat hot number of 0.5% in November.

     Other news in the housing industry is the change in FHA guidelines. I will be doing some research on this today. From what I’ve been able to read so far today, Upfront Mortgage Insurance Premium will go up, seller’s concessions will go down, and if your credit score is below 580, borrowers will have to put down 20%. But to be truthful, none of my investors are accepting loan with credit scores that low. This will all be put into practice this Spring. But again, let me do more research for you and I’ll get back to you.

     For now, I recommend that you float your mortgage interest rate if you aren’t closing soon. Otherwise, lock to take advantage of the better rates we’ve been having lately.

      You can also check out the Daily Rate Lock Advisory each day. This report normally comes out around 10am.

     And as always, I will report daily on twitter @mmtgsolutions on the mortgage interest rates and what to expect for the day. If one of these reports moves the market in a significant manner, I’ll write about it here.

     Please remember, I welcome your comments to this and my other posts.

To an  inspiring week,

Betsy Moore

206-331-2749

     Though this is only a Fannie Mae guideline change, the lines tend to blur between Fannie and Freddie Mac as most lenders sell their loans to both.  I suspect that most lenders will adhere to this guideline for all of their conforming and jumbo conforming loans even for FHA.

     So what does this 45% debt to income ratio mean and how is it calculated? Very simply it means that your total debt–credit cards, installment payments, even student loans that are in deferred mode, and your mortgage payment–can’t be above 45% of your total monthly gross income.

     To calculate your debt to income, add up all of your minimum payments then divide by your total monthly income. Here’s an example:

Total monthly gross income:                                                                                $5000.00

Total monthly debt without mortgage payment:                                         $1500.00

Plus mortgage payment (principle, interest, taxes and insurance):   $2250.00

Total monthly debt:                                                                                                  $3750.00

 Divide $3750.00/$5000.00 =                                                                                   45.00%

     To make this calculation easier, you use this calculator to find out what you can qualify for. Or if you would like, please call or email me and I’ll be happy to assist you.

    And as always, I report daily on twitter  @mmtgsolutions on the mortgage interest rates and what to expect for the day. If one of these reports moves the market in a significant manner, I’ll write about it here.

     Please remember, I welcome your comments to this and my other posts. Have an inspired week.

     Betsy Moore

     www.mooremortgagesolutions.com

     206-331-2749