Daily Mortgage Rates LIVE - 09/18/2024 - FHA Loans

Welcome to another episode of Daily Mortgage Rates LIVE! In today’s installment, we’re diving deep into the world of FHA loans—one of the most popular options for homebuyers and refinancing. Whether you're a first-time buyer or looking to upgrade, understanding FHA loans could be your key to unlocking the door to your dream home.

Join us as we break down the essentials of FHA loans: what they are, how they work, and why they might be the perfect fit for you. We'll explore the benefits, including lower down payment requirements and more lenient credit score standards. Plus, we’ll discuss recent updates and changes that could impact your decision.

Our expert hosts will share their insights and answer your burning questions, helping you navigate the complexities of FHA loans with ease. Don’t miss this chance to get informed and empowered about your mortgage options!

Tune in to Daily Mortgage Rates LIVE! and get ready to take your next step in home financing with confidence.


For more episodes visit: https://themortgagecalculator.com/Page/Daily-Mortgage-Rates-LIVE-Video-Podcast

About The Mortgage Calculator:

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as over 5,000 Non-QM mortgage loan programs using alternative income documentation! 

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of over 350 licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mor

Catch all the episodes of Daily Mortgage Rates LIVE at https://themortgagecalculator.com/Page/Daily-Mortgage-Rates-LIVE-Video-Podcast

Check out all episodes of Daily Mortgage Rates LIVE at https://themortgagecalculator.com/Page/Daily-Mortgage-Rates-LIVE-Video-Podcast

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA and USDA Programs, as well as over 5,000 Non-QM mortgage loan programs using alternative income documentation! Non QM Loans include Bank Statement Mortgages, P&L Mortgages, Asset Based Mortgage Programs, No Ratio CDFI Loan Programs, DSCR Investor Mortgages, Commercial Mortgages, Fix and Flip Mortgages and thousands more!

To apply for a mortgage please visit our Quick Mortgage Quote Page at https://themortgagecalculator.com/Mortgage/QuickQuote

The Mortgage Calculator is a registered DBA of Mortgage Calculator Company LLC. NMLS ID #2377459. Programs and rates are subject to change without notice. Mortgage Calculator Company LLC is licensed in the following states that require specific licensing disclosures: AZ (#1040352), CA CFL (60DBO-171188), GA Georgia Residential Mortgage Licensee (#2377459), IL MB.6761755 Illinois Department of Financial and Professional Regulation, Division of Banking, 100 West Randolph, 9th Floor, Chicago, IL 60601 1-888-473-4858. Not licensed or conducting business in New York.

For more info visit https://themortgagecalculator.com...

Transcript

Restream recording Sep 18, 2024 • 03:02:55 PM: 0:09

All right. So welcome everyone. My name is Kyle Hiersche. I'm the COO of the Mortgage Calculator joined here by our president of Hiersche and our CSO, Jose Gonzalez. We are a lender that specializes in non QM loans. And what we do every morning at 11 a. m. Eastern on this show is go through our actual live mortgage rates. And then we do a deep dive into a different loan type. Today's loan type is going to be FHA loans. Jose will take us through a few different options, maybe some things you didn't know about with FHA loans, even But first, we'll pull up our rates like we do every morning. So, Nick, if you're ready, let's go ahead and pull up today's interest rates and see what they are looking like. All right, big news today. So, uh, looks like rates are about the same. Uh, hopefully most of the change is already priced in, but Looking good. We will compare all of the standard programs for today. It is September 18th, just after 11 a. m. Eastern. So all of our initial rate sheets are live for all of our standard programs. If you'd like a full breakdown and itemized loan estimate with all of the fees that go into the APR, please get with our team members. They'd be happy to help you out. For the demos today, as we do every day, we'll set up a basic scenario to compare across programs. We'll set up a single family home, 500, 000 purchase price, 400, 000 loan amount. Corresponds to 80 percent loan, 20 percent down payment. We'll set an estimated 760 credit score and an estimated 40 percent debt to income ratio. So with those basic settings, all the rates up nice and big. So first up 30 year fixed conventional for a primary home, typically the most common option most people think of. And finally, some more downward movement. We love that rates as low as 5. 5 today. Absolutely amazing. Definitely new one year lows today. And finally, PR 5. 810 there with all of the fees included. Now, if for any reason, our customer doesn't qualify for a conventional loan, we typically want to present an FHA option. FHA allows more leniency on credit issues and a much higher debt to income ratio overall, but does require upfront and yearly mortgage insurance. FHA today coming in at 4. 758. Finally, PR with all the fees included 5. 676. So notice if our customer qualifies for both they could choose the FHA if they're willing to do the mortgage insurance and our customers that need to use it. Definitely a great option today and rates are smoking. Moving on to our VA is only for our eligible vets and active service members. If you are VA loan eligible, these programs are amazing. Rates as low as 4. 99 today. Final APR 5. 275 with the standard. Funding fee there and notice if we compare across the programs, the VA is gonna be the best option for our eligible borrowers with the lowest a PR. So definitely great option for our eligible vets. And the final standard option that any bank or lender has is U-S-D-A-U-S-D-A is only for properties in rural areas of the country, the USDA eligible areas, the property's eligible, and our borrower eligible. These are great options to consider rates as those 4.875 final a PR with the fees here, 5.598. So if we're comparing our customer shopping in that area of the country that qualifies, they'll be comparing typically to FHA, which USDA is going to beat out by Uh, touch there and compared to conventional, it's going to be divided by a touch. So great option in those areas that rounds out the standard options that every banker lender has. Uh, but if our customer doesn't qualify, many banks have to deny them. That's where we'd love to present our additional options, 5, 000 plus programs, starting with our non QM, all doc options for a primary home. So far, borrower doesn't qualify using tax returns and standard documentation for conventional loan. We need to flip to alternative docs. We flip down here to our non QM AltDoc primary option, rates as low as 6 percent for bank statement program. Final 309 and as usual, we're within a half a point of the conventional, uh, rates just to switch to AltDoc. So great option for our borrowers that need to use it and still get that home they really want. And moving on to our investment properties. Tons of options for investments. First up, our non QM alt docs. So again, bank statements, NNI, P& L, or similar. This option here's a bank statement option at the lowest rate, 6. 375. Final APR, 6. 694. Looks like that went down a touch since the last show, which is great. And let's move on to the other investments. Nice. More movement here. First up, our conventional option for investment properties. Remember government programs are not eligible. So no VA, FHA or USDA, but we do have conventional for investment properties rates as low as 6. 125 today, final APR 6. 452. So it's beating our all doc option. And for the first time in shoot almost about a year, conventional is finally beating DSCR again for a standard DSCR, uh, which is typical, but we've been Spoiled the last year where it wasn't so moving on to our DSCR option our favorite loan programs DSCR stands for debt service coverage ratio. No income needed No employment needed from our borrower Simply use estimated rents from the appraisal to determine a DSCR ratio if the estimated rents can cover the expenses That's a ratio of one or higher which is preferred And for this option, we add a three year prepayment penalty, which is pretty standard. Rates come in today at 6. 25, final APR 6. 529, so just a touch above conventional. Uh, we've been spoiled the last, uh, about year here where DSCR was actually beating conventional, but we expect to see this go down, uh, probably later this week. And we can be conventional with a five year prepay. So some of our DSCR options allow a five year prepayment penalty to sweeten the deal rates as low as 5. 875 final APR 6. 193 smoking conventional there. So still great options. And the final one here is our DSCR with no prepayment penalty rates as low as 6. 375 final APR 6. 694. So that's a touch higher than our conventional option, which is typical. I'd still say a hundred percent of investors Uh, when the cost is, uh, relatively the same, we'll choose a DSCR low. And looks like some movement on our second mortgages as well, which is good. Our second mortgages are very popular right now as many of our customers have a low rate first mortgage lower than the rates you probably see here. So they want to still access their equity, but don't want to touch that first mortgage. So typically the only option is the HELOC, but we now have our 30 year fixed second mortgage options for a primary home beating HELOC rates by quite a bit. And obviously they're fixed rate rather than variable rates as low as 8. 125 to get cash out of that primary home. Final APR 8. 527, which is a touch lower than it's been recently. And we can use the same program for an investment property, get cash out, not touch the first mortgage, rate as low as 9. 5. Final APR 9. 7. And we'd love to continue to see those rates drop. Now let me switch back into our topic for today. When we do our live demo here, we always have to compare the same scenario across all the programs, right? So a pretty standard scenario, uh, FHA loans are typically used for not a standard scenario necessarily. So Jose will go through the different options and ways we can use FHA loans that we don't get to present on our live price every day. So. Jose, let's check out our FHA options. Good morning. Today, I'm going to be sharing some FHA options for you. Uh, some outside the box options. FHA loans, uh, contrary to popular relief are not for first time home buyers. Uh, that's a confusion. Uh, FHA loans are for primary residences, which is why possibly some first time home buyers confuse Uh, a primary home with, uh, being a first time home buyer, which is not the case. You do not have to be a first time home buyer to be able to purchase a property with an FHA loan, nor are there any income restrictions on FHA loans. So let's jump right into the options I have for you today. I have some outside the box options for you. First, obviously it's just our standard, just to put things into context, the FHA 3. 5 percent down purchase. 5. 625 is our lowest cost option at par. You can buy that down all the way to 4. 75 for FHA purchase. 3. 5 percent is a minimum down payment. Next option is a forgivable down payment assistance option using an FHA loan. Uh, rates have, uh, dropped on this product as have the cost. Um, the great thing about our DPA product, especially this one, which is forgivable, is that it is, uh, lender paid pricing. Right. So what you see here is the only additional cost regarding, uh, rate that the borrower is going to pay. So 8. 25 is almost at par, uh, 0. 375 is the cost on that. And you can buy that down to 7. 5 percent at a cost of 2. 125. This one does give 3. 5 percent down payment assistance, which is forgivable. It is, uh, forgiven after 60 payments as long as the loan is, uh, current. Now we have our low credit score option with a 500 credit score. Anytime the score dips below 580, it is maximum 90 percent LTV. So here you are looking at 7 percent as our lowest cost option, and you can buy that down all the way to 6. 5 percent with a 500 credit score. This is a renovation loan option. Uh, so if the property has condition related, uh, issues that won't let it close with a regular FHA loan, the renovation loan would be the way to go. Or if the borrower simply wants to make that purchase into their dream home, new kitchens, bathrooms, roof, windows, all the good stuff. 6. 25 is the lowest cost option with a lender credit, and you can buy that down all the way to 5%. Uh, to further, uh, the dream home here, now we're having the one time closed construction to permanent loan. Uh, this is where you can buy the land and build a home, so definitely, uh, build your dream home. Now, what you have essentially here is a one year rate lock, basically is what goes on here, right? That's why the rate is a little bit higher, so you're looking at, uh, this is a 12 month construction term. 8. 25 is our lowest cost option, costs in half a point, and you can buy that down to 7. 125%. Now, our manufactured home option, we all know manufactured homes can be a little bit tricky, uh, they're great to finance with an FHA loan, as there is not a loan level price adjustment, or at least not much of a loan level price adjustment, let's put it that way, um, the only, uh, catch here is to be aware on the manufactured homes when going with FHA, a structural engineer's report is required, so make sure that you disclose for a structural engineer, uh, report expense When disclosing the file, 5. 75 is your lowest cost option, and you can buy that down to 5 percent at a cost of 2. 125 points. And our last option here is the FHA Streamline Refi. This is a refinance where you do not need an appraisal, and you also do not need to verify income or credit. They will just only verify the housing payment on the property. Uh, the one thing to note about the FHA streamline is that the loan amount cannot increase, uh, so there will exist a possibility that the borrower will have to pay closing costs out of pocket, 5. 624. Is our lowest cost option and you can buy that down all the way to 4. 75%. So do look to the mortgage calculator for all your FHA loans. All right. Thank you, Jose. Okay. Uh, let's see, do we have a question here in the chat? Uh, what does news about feds lowering rates? Not sure exactly what you, uh, mean there. Uh, but today's the day I believe they're going to meet today. And they're going to discuss, uh, hopefully what they're going to do. Uh, the 10 year treasury ticked up a little bit today in preparation for the announcement. They're just, uh, basically hedging their risk, but hopefully the, uh, announcement will be as expected, hopefully a 25 basis point cut, maybe a 50 basis point cut. Uh, and then we'll see what happens once they make their announcement. That would be nice 50 basis points cut. All right. Well, thank you everybody for tuning in I don't see any other questions So we'll go ahead and wrap it up Remember that we do this show at 11 a. m Eastern every weekday where we go through our live rates and then do a deep dive into different loan topics So we will have a new loan topic for you tomorrow We'll see you all tomorrow 11 a. m eastern for the next episode of daily rates live with the mortgage capitalists