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Overview of FHA requirements for Mortgage Insurance
Mortgage Insurance:
To protect lenders against losses that result from defaults on home mortgages the FHA requires borrowers making a down payment less than 20 percent to have mortgage insurance.
Annual Mortgage Insurance Premium
In August of 2010, President Obama signed a bill giving HUD the flexibility to increase Annual Mortgage Insurance Premiums. This law, effective as of October 4th, 2010, allows HUD to increase the Annual Mortgage Insurance Premium amount from .5% to 1.5% on loans with a down payment of 5% or more; and .55% to 1.55% on loans with less than 5% down.
Upfront Mortgage Insurance Premium
Loans for FHA regular purchases and refinance products done on or after October 4th, 2010 will have a 1.00% Upfront Mortgage Insurance Premium; which is decreasing from 1.5% and is subject to change. Ask your Loan Officer what the current Mortgage Insurance is at the time of your loan.
Below are the conditions that must occur for the monthly mortgage insurance payments to be automatically terminated.
Loan Term Initial LTV LTV for termination Additional Conditions
15 years or Less ≥ 90% 78% Regardless of how long the premium has been paid
15 years or Less ≤ 89.99% n/a no Annual premium charged
Over 15 years > 80% 78% Provided the Annual premium has been paid for at least 5 years
Go Green with Your Home Loan
Everyone is saying how we should be more Energy Efficient and Go Green these days. Did you know that you can make your home Energy Efficient, allowing you to save money yearly on your utility bills? Home Town Mortgage has the Energy Efficient Home Loan Program that will allow you to ensure you home is Energy Efficient while rolling the cost in to the loan amount.
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How do Write Offs Effect My Home Loan?
Its Tax Season time to gather up all my expenses and write them off!! That would be a great idea if you are not planning on purchasing a home anytime soon. If you are looking at obtaining a mortgage within the next couple years, think again before writing anything off. Common deductions on the Schedule A/Form 2106 can come back and become a nightmare during your loan process. Also known as Unreimbursed Expenses, these deductions are subtracted from your repayment income.
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People You Can Trust
Going through the Home Loan Process can be scary and a little confusing. At Home Town Mortgage our staff is here to make your Home Loan Process as stress less as possible and we are always here to answer your questions and walk you through the Home Loan Process. Our staff at Home Town Mortgage ensures that we provide the most outstanding customer service out there. We want to establish relationships with our customers that will last a life time.
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Credit Scores 101
Do you know what your credit score is? Have you ever seen a credit report? What’s good credit and do you keep it good? What’s hurting your credit and how do you get if off of your credit report? You have to power to affect your credit positively and we have the answers on how to do that!
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Educate Yourself!
Home Town Mortgage Services takes pride in our borrowers. We want to make sure that our borrowers make educated decisions when it comes to the Home Loan that fits them best. That is why we provide our borrowers with the tools they need to be educated about the Alabama Home Loans that are available to them.
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Repossessions Effect Home Loans
Any type of repossession listed on a credit report can be very damaging to an individuals overall credit rating. It is an issue that needs to be resolved before obtaining a home loan, and Home Town Mortgage is able to help you do just that.
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USDA Has an Income Limit?
Unlike most Home Loan Programs that have loan amount limits, USDA has income limits. USDA was originally made for families with moderate income to help them achieve their goals of home ownership. Income limits can qualify through out each state as well as county. Home Town Mortgage has provided some valuable information about the income limits along with how to calculate your household income.
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Checklist for Purchasing a New Home
When you have decided to pursue your American Dream and become a home owner take the time and be patient. You want to find the home that fits all of your needs as well as your families. Find out what your “wants” are and what your “needs” are. Make a checklist to ensure you get the home just for you.
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Apply Now!!
At Home Town Mortgage Services we make it easy for our Borrowers to start the Home Loan Process. You are just one step closer to getting the Alabama Home of your Dreams. Apply today online!
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