Mortgage Fees Can Affect Your Affordability

Originally posted 2009-01-03 12:24:29. Republished by Blog Post Promoter

When choosing a mortgage company look at the fees you are being charged because that may affect your affordability of the loan at the beginning of the process.   Notice that the fees are different if you live in certain cities.   Below is the fee structure for Fifth Third Bank

 

Standard Fees	Conventional/Jumbo	FHA
 Funding Fee – PA, NJ, NY, MI, OH, IN, KY, WVA, N.KY, DE         Â	 $495.00	 $595.00
Funding Fee – IL, WI, MN, IA, SD, NE                     Â	 $520.00	 $650.00
  Funding Fee – NC, SC, GA, TN, VA, FL, AL, MS         Â	 $495.00	 $595.00
 Funding Fee – TX, MO, KS, AR, LA, CO, ID, OR, WA, NM, NV, WY, UT    *Funding fee is per the subject property’s state       Â	 $525.00	 $625.00
 Re-draw Fee   Â	 $150	 $150
 Rush Closing Request (When able to accommodate less than 48 hours Charlotte Fulfillment Chicago Fulfillment Cincinnati Fulfillment Grand Rapids Fulfillment   Â	 $100.00 $100.00 $100.00 $200.00 $100.00	 $100.00 $100.00 $100.00 $200.00 $100.00
Flood Certification               Â	 $4.00	 $4.00

 

Tax Service Fee is $72.00.  This fee is for the mortgage company to pay your taxes from your escrow account.  The taxes that is paid in your mortgage for the mortgage company to pay on your behalf sits in an interest bearing account until such time as when it is necessary to pay on your behalf.  However, the bank is charging for this when in fact they are getting paid on the money already.

Mr. President, I Have a Solution

The crisis that this country is enduring has created many scars.  Many that can be patched by offering a solution to the financial burden that is burning a hole in the average American’s dream of homeownership. 

There are many offering there verison of solution.  Well, I too, feel that it is my turn to offer my solution.

My solution is for homeowners.  I think, a viable solution would be to allow the homeowner to use FHA/VA  insurance to pay the homeowner’s mortgage current.  The FHA/VA insurance provides protection to the lenders for losses if the homeowner defaults on the loan.  The homeowner who pays for this insurance to protect the lender should be able to use this insurance to bring his or her mortgage current if they can prove to the lender that he or she is capable of paying the mortgage once the mortgage is brought current.  Utilizing this insurance will remove the burden off of the tax payer for FHA/VA insured loans and put it on the insurer.

For all other mortgages, the mortgage can be renegoitated at the current value and at a better fixed rate. 

The  mortgage crisis is not going away, so no action will equal disaster.  Let’s think outside the box to keep the American Dream alive.

Even Fannie Mae is Time Conscience

The number of homeowners in default has led Fannie Mae to experiment with a pre-approval process for a short sale prior to getting an offfer on the property.

If this test works, it will reduce the time necessary to get the short sale approved and make the concept of a short sale more attractive for the seller, Realtor, and more importantly the potential buyer.  Often times,  buyers have passed and not put offer in on homes that were subject to a short sale approval due in part to the longevidity of getting the offer approved.  I am sure that Fannie Mae may have discovered as many Realtor have that the longevidity contributes greatly to the attempted short sale often times going into foreclosure.  When this happens the lender now has the added risk of losing more money by the value being exposed to the downward trend in market value. 

This experiment is hoped to yield a closing process that is closer to that of a traditional conventional mortgage or FHA loan.  Both products can take up to 30 to 45 days to close were as the short sale have taken as long as eight weeks. 

Lastly, this new concept is being experimented upon in hopes to move the market to an upward trend by reducing the amount of properties that are on the market for sale.

Good News, Investors

The flipping rules have been relaxed until June 2009.  Until recently, an investor has to wait 90 days before the investor could resell a home to a FHA buyer.

The reason for this change was because investors are helping the economy by repairing the large number of foreclosed home thoughout the country.

According to the FHA, “under the revised policy the purchasers will have to be financed capable to handle the mortgage and underwriters will talke a hard look at the appraisal.”  As a result of the changes, the FHA will not be, or at least for the time being, turning down mortgages because the previous owner owned the property for less than three months.