FHA Changes; Confusing ARMs; Appraisal Cutting; and Home Renovation

Date:July 23, 2010 | Author: | Category:Mortgages

It’s Friday and that means a roundup of mortgage-related posts from our sister blog, Mortgages Unzipped. Some are new and some are from the archives, but make sure you catch Justin McHood’s mortgage term of the week — he makes mortgage terminology understandable!

  • In Summary of FHA Changes, the latest 2010 changes in loan requirements and rules are clearly explained by Evan Vanderwey: “FHA intends to add tiers to their Mortgage Insurance Pricing. For lower credit scores, you pay higher MI.  For less down, your rate will be higher. For a combination of the two, the rate is higher still. The good news here is that FHA becomes more palatable for more people. If you have good qualifications, then you’ll shoulder less of the cost of the riskier loans.”
  • Understanding Adjustable Rate Mortgages (ARMs) Part I finds contributor Keane Ng explaining a complicated loan concept: “Many consumers view ARMs as risky or dangerous loans.  There is no question that these mortgages come with more coherent risk than a fixed mortgage, but they can often be useful for the right consumer in the right situation.  Truly understanding these loans is the first step.”
  • With Mortgage Definitions: Appraisal Cutting, lender Justin McHood continues his series explaining mortgage terms that fly over the average consumer’s head: “Occasionally, when an underwriter reviews the appraisal provided by the licensed appraiser, they will engage in the sport of Appraisal Cutting by reducing the appraised value provided by the appraiser by a random, arbitrary number.”
  • In And Now for Something Slightly Different, Chris Jones takes a detour from mortgages to relay some funny tips on home renovation: “Don’t get an expert to help you. Look, it’s really not that hard to install a sprinkler system.  I’m sure that most accountants know right away whether they want a Toro 53805 or a Rain Bird SST-600I system for their house.  Wiring?  C’mon.  Who doesn’t know how to do that?  Metal v plastic?  Pop-up v housed?  It’s a cinch!”

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